Governor Brown Signs Tax Agency Reorganization Bill
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Late last month Governor Jerry Grown signed Assembly Bill (AB) 102, which has resulted in a significant change in the system for administering California taxes and a major reduction in the responsibilities of the California State Board of Equalization (BOE). The BOE has been responsible for the collection of California sales tax, state-assessed property taxes and many other business taxes and fees. The BOE also serves as the appeals body for most state-imposed taxes, including the income taxes administered by the California Franchise Tax Board.
The bill establishes two new agencies - the California Department of Tax and Fee Administration and the Office of Tax Appeals. The California Department of Tax and Fee Administration will assume the BOE’s administrative and regulatory functions for sales tax and other business taxes and fees beginning July 1, 2017. The Office of Tax Appeals will assume most of BOE’s adjudicative functions starting on January 1, 2018, with tax appeals panels consisting of three administrative law judges. AB 102 does not modify the BOE’s authority under the California Constitution to set certain tax rates and to oversee property tax assessments, utility tax assessments and tax assessments on insurers.
The bill establishes two new agencies - the California Department of Tax and Fee Administration and the Office of Tax Appeals. The California Department of Tax and Fee Administration will assume the BOE’s administrative and regulatory functions for sales tax and other business taxes and fees beginning July 1, 2017. The Office of Tax Appeals will assume most of BOE’s adjudicative functions starting on January 1, 2018, with tax appeals panels consisting of three administrative law judges. AB 102 does not modify the BOE’s authority under the California Constitution to set certain tax rates and to oversee property tax assessments, utility tax assessments and tax assessments on insurers.
