1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 9 REPORTER'S TRANSCRIPT 10 JUNE 14, 2016 11 12 13 14 15 16 BUSINESS TAXES COMMITTEE 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 3 For the Board of Equalization: Diane L. Harkey 4 Chair 5 Fiona Ma, CPA Member 6 Jerome E. Horton 7 Member 8 Sen. George Runner (Ret.) Member 9 Yvette Stowers 10 Appearing for Betty T. Yee, State Controller 11 (per Government Code Section 7.9) 12 13 Joann Richmond Chief 14 Board Proceedings Division 15 16 For Board of Equalization Staff: Richard Parrott 17 Chief Special Taxes Policy and 18 Compliance Division 19 Pamela Mash Tax Counsel 20 Legal Department 21 ---oOo--- 22 Speakers: Randall Cheek SEIU Local 1000 23 James Dumler 24 McClellan Davis 25 ---oOo--- 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JUNE 14, 2016 4 ---oOo--- 5 MS. MA: Thank you all. You may be seated. 6 Okay, Ms. Richmond, please introduce our 7 first item. 8 MS. RICHMOND: Good morning, Chairwoman Ma 9 and Members. Our first item on this morning's 10 agenda is the Business Taxes Committee. Ms. Harkey 11 is the Chair of that committee. 12 Ms. Harkey. 13 MS. HARKEY: Thank you. Let me get myself 14 organized here. 15 All right. Thank you, Mrs. Richmond. 16 Members, Business Taxes Committee is called 17 to order. 18 Ms. Richmond -- or Mr. Richard Parrott, 19 will you please introduce the item. 20 MS. MA: Are the mics on? 21 MR. PARROTT: Thank you. Good morning, 22 Members. I'm Richard Parrott, Chief of the Special 23 Taxes Policy and Compliance Division in the Business 24 Tax and Fee Department. With me today is Miss Pam 25 Mash from our Legal Department, and we have one 26 agenda item for your consideration today. 27 Staff requests your approval and 28 authorization to publish proposed Cigarette and 3 1 Tobacco Products Tax Regulation 4001, Retail Stock. 2 Since the March Business Taxes Committee 3 meeting, staff has continued to work with the 4 interested parties to develop language supported by 5 all parties. 6 We ask that the Board approve Alternative 7 1, staff's recommendation, which defines and 8 clarifies the term "retail stock" and explains when 9 inventory is considered held in retail stock; 10 provides examples to assist taxpayers in the 11 application of tax; and provides a presumption of 12 distribution for cigarette and tobacco products no 13 longer in the distributor's possession and examples 14 of evidence of how distributors can overcome this 15 presumption. 16 We have speakers on this agenda item and 17 we'd be happy to answer any questions you may have 18 after their presentation. 19 MS. HARKEY: Thank you. 20 Will the speakers please come down? I 21 have -- if you have not already signed in, please do 22 so. I do have Randall Cheek here on this one, on 23 this form. 24 Please introduce yourself for the record. 25 MR. DUMLER: James Dumler with McClellan 26 Davis. 27 /// 28 /// 4 1 ---oOo--- 2 RANDALL CHEEK 3 ---oOo--- 4 MR. CHEEK: Randy Cheek with SEIU Local 5 1000. 6 And we just want to say that we want to 7 thank Ms. Harkey and her staff and staff of the BOE 8 for working with us. We feel that this is an 9 agreement that we can all agree to and look forward 10 to working with your staff again. 11 MS. HARKEY: Thank you. 12 ---oOo--- 13 JAMES DUMLER 14 ---oOo--- 15 MR. DUMLER: And the same. Thank you, 16 Members. Thank you, Ms. Harkey and the Business Tax 17 Committee for reaching out to taxpayers and their 18 representatives. And thank you to SEIU for allowing 19 us to work with them on the revision they submitted. 20 I think it'll provide useful guidance to taxpayers 21 because I would ask that you vote in favor of it. 22 MS. HARKEY: Thank you very much. 23 Members, are there any questions? 24 MR. HORTON: Move adoption of staff 25 recommendation. 26 MR. RUNNER: Second. 27 MS. HARKEY: Thank you. We have a motion 28 and a second. 5 1 Any objection? 2 Such will be the order. 3 And looks like third time's the charm, 4 guys. 5 MR. DUMLER: Thank you. 6 MS. HARKEY: Thank you very much. 7 This concludes the Business Taxes 8 Committee. 9 ---oOo--- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, Kathleen Skidgel, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on June 14, 2016 I recorded verbatim, in 10 shorthand, to the best of my ability, the 11 proceedings in the above-entitled hearing; that I 12 transcribed the shorthand writing into typewriting; 13 and that the preceding pages 1 through 6 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: June 27, 2016 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL, CSR #9039 22 Hearing Reporter 23 24 25 26 27 28 7