Taxpayers' Bill of Rights Hearing Responses to Presenters – 2019
Hearing Information
State Board of Equalization Taxpayers' Bill of Rights hearing for 2019 (10:00 a.m.)
August 27, 2019 – Sacramento, CA
The hearing provided an opportunity for taxpayers, county assessors, and other local agency representatives to provide comments on items discussed in the Taxpayers' Rights Advocate's Annual Report; and present ideas, concerns, and input on the quality of agency service related to the Board of Equalization's administration of its programs. At the hearing one could comment on the property tax programs administered by the Board of Equalization or local county agencies statewide; as well as present ideas on legislation to further voluntary compliance or the relationship between government and taxpayers for the alcoholic beverage tax. The hearing provided a venue for parties to identify ways to resolve any problems identified in the Taxpayers' Rights Advocate's current Annual Report; the current annual report for the August 2019 hearing date was the fiscal year 2017-2018.
Webcast for Meeting and Responses
Webcast
Webcast for Taxpayers' Bill of Rights hearing:
- August 27, 2019 Meeting – see Agenda item C1
Responses to Presenters
Actions in Response to Presenters
* In response to comments regarding disagreement with the BOE's Legal Department position on when it is appropriate for an assessor to “disregard” a deed, the Taxpayers' Rights Advocate (TRA) Office explained that it had worked with the presenters in the past on this matter and coordinated with the Legal Department to discuss their analysis. The TRA Office explained that the Legal Department had reviewed previous input to ensure comments on when it is appropriate for an assessor to determine when the deed presumption may be overcome and the associated lien date enrollment of real property were not different than what the Legal Department had responded to previously. The Legal Department reviewed its position and determined that the issues raised by the presenters have been addressed in multiple prior legal letters/opinions since 2002; and that it still holds that it is within the discretion of the assessor to, under appropriate conditions, determine the owner of the property and the assessor's determination is authorized by various statutory and regulatory provisions. The presenters indicated they believe an assessor must always consider the holder of legal title to real property on the deed as the owner of the property for assessment purposes. The Legal Department explained that they were asked to weigh in on the question of whether the assessor can “disregard” a legal title transfer; and that Evidence Code section 662 provides that if there is clear and convincing evidence, the deed presumption may be overcome. The Legal Department further explained that if the presenters do not think overcoming the deed presumption is appropriate under any circumstances, it would require a change to the Evidence Code. The presenters' position differs from that of the Legal Department, but the matter has been re-reviewed and the Legal Department's position stands and no further action can be done. The presenters seek a rule or code that prohibits an assessor from applying a provision of the Evidence Code. That is not within our agency's jurisdiction.
* As to comments that there was no reporting form to capture private uses of publicly (government) owned property and that there should be a form available whereby a lay person can be informed of the mandatory reporting requirements of private usages on public property, the Taxpayers' Rights Advocate (TRA) Office explained that there is an existing reporting form for reporting uses in public owned property, form BOE-502-P, Possessory Interest Annual Usage Report, which is used by county assessors statewide. Assessors send the form to government entities in their county annually with a letter requesting completion. The TRA Office explained that the legislature put Revenue and Taxation Code Section 480.6 into law to place the reporting requirement on government owners to report information on property it owns that is used by others that create a taxable possessory interest. The TRA Office advised that the reporting form is not for lay persons to use, since the reporting requirement rests on government agencies that allow other parties to use its property. The TRA Office further advised that it had worked with and communicated with the presenter in the past to address concerns raised regarding reporting uses in government owned property.
Following the August 27, 2019 Taxpayers' Bill of Rights Hearing, discussion continued about the possessory interest reporting form at the September 24, 2019 Board Meeting. At that meeting, the Property Tax Department indicated that it had reviewed the form and determined the form was complete and functions as intended. The TRA Office explained the nature of the presenter's concerns and response letters that had been sent to the presenter. The TRA Office had previously solicited input from Assessor's offices on whether form changes were needed and polled the Assessor's offices to ensure the form was sufficient to obtain information on assessable possessory interests; the information was provided to the Property Tax Department for examination. The California Assessors' Association (CAA) President also reported at the meeting that the President had asked all 58 County Assessors if they had any issues around possessory interests that should be considered in light of the presenter's questions or comments. The CAA President described the process by which form BOE-502-P is annually sent to government entities by the Assessor; and indicated that the CAA Forms Subcommittee considered the suggestions of the presenter and decided those suggestions were not needed. The CAA President confirmed that the taxpayer does not self-report (so no penalties can arise) and it is the government entity that reports; and reiterated that form BOE-502-P is only one way that Assessors are advised of uses in publicly owned property. Private uses in publicly (government) owned property are also reported in a Preliminary Change of Ownership Report (form BOE-502-A) or Change in Ownership Statement (form BOE-502-AH); or provided by a government entity in any format as permitted by Revenue and Taxation Code section 480.6.
* In response to comments made regarding conflicts of interests in appraising property owned by the Assessor and Assessor's managers, appeal proceedings, and suggestions for assessment appeals and appraisal system for appraisers, the Taxpayers' Rights Advocate (TRA) Office communicated with the presenter providing information on existing statutory provisions, property tax rules, and guidance that address the presenter's concerns. The TRA Office directed the presenter to Letter To Assessors' 2008/058 which discussed conflicts of interests in assessors' offices and Revenue and Taxation Code section 672 and 1365 which address preventing conflict of interests in an assessor's office. Advised presenter that our agency's website contained resources on assessment appeals and our agency's role in prescribing rules and regulations that govern local boards of equalization when equalizing assessments and issuing instructional documents to assist appeals boards in the performance of their duties. The TRA Office shared with the presenter that our agency had adopted rules in the assessment appeals process and directed the presenter to LTA 2019/051. In response to the presenter's suggestion that property tax appraisers of county assessors' offices should be certified by the Bureau of Real Estate Appraisers (formerly Office of Real Estate Appraisers), explained that the legislature had previously dealt with that when the Real Estate Appraiser Licensing and Certification Law was added in 1991 that applies to appraisers performing appraisals for a real estate related financial transactions; and to refer to LTA 91/32. The TRA Office also explained that our agency certifies and provides training to appraisers of county assessor's offices statewide and our website contains information about this function. With respect to county assessment appeal filing fees and for findings of facts, directed the presenter to Revenue and Taxation Code section 1611.5 that provides for charging of fees for findings of fact, as well as Government Code section 54985 that provides authority to the county board of supervisors to charge fees; and the presenter may wish to discuss fees with the county boards of supervisors. The TRA Office explained the provisions of Revenue and Taxation Code section 1624 which permits a taxpayer to request a certain member not participate in the appeal hearing for the taxpayer's appeal. The TRA Office further explained that there are training requirements for assessment appeals boards and that our agency's website contains such information. With respect to the presenter's comments concerning burden of proof, the TRA Office referred the presenter to Revenue and Taxation Code section 167 and Property Tax Rule 321.
* In response to comments regarding property tax and assessed value increases following the September 2015 Butte Fire in Calaveras County, the Taxpayers' Rights Advocate (TRA) Office explained that it was currently analyzing information on the presenters' properties to ensure that the presenters were treated fairly in accordance with property tax law. The TRA Office advised that generally increases in assessed value are limited to no more than 2 percent per year under Proposition 13 but that just applied to increases in the factored base year value. The TRA Office conducted a comprehensive analysis on the properties and communicated the results of the review to the presenters by letter. The TRA Office explained California's property tax assessment system and limitations of established by Proposition 13, reasons for assessed value increases from the year prior to the fire through 2019, as well as provided a ten-year history of assessed values on the properties with a description of improvements in California's housing market. The TRA Office analysis found that there were increases in assessed value beyond 2 percent from one year to the next, but the increases complied with the law because the property was assessed below its Proposition 13 factored base year value under a decline in value status at market value (Proposition) or when there was new construction. The TRA Office ensured that the presenters' properties were not over-assessed as they had thought; and provided a detailed analysis to them so they understood why the assessed value and property tax increases were correct.
* In response to comments regarding missing documents from the State Board of Equalization's website, the TRA Office explained that our agency understands the importance of having these documents on our website and is working diligently toward making them comply with accessibility requirements. In 2019, state websites were required to meet the web accessibility standards of Assembly Bill 434. Information has been posted to our website advising users that if a document can't be accessed via its link, it can easily be obtained by sending an email request. Our agency has made great strides in converting documents to make them comply with accessibility requirements and reposting them to our website as fast as possible.
* In response to comments regarding the alcoholic beverage tax and importance of advising affected taxpayers of reporting obligations as new product categories are developed, the TRA Office explained that the presenter could contact it if any information needed further clarification and that it would coordinate with the California Department of Tax and Fee Administration; the agency which under an interagency agreement collects and administers the program in cooperation with our agency.