Governor Brown has signed budget trailer bills SB 86 and AB 102 creating The Taxpayer Transparency and Fairness Act of 2017: California Department of Tax and Fee Administration: Office of Tax Appeals: State Board of Equalization which restructures tax responsibilities into three separate entities: the State Board of Equalization, the California Department of Tax and Fee Administration and the Office of Tax Appeals.
Effective July 1, 2017, the Board of Equalization (SBOE) reverts back to its original constitutional responsibilities. These include oversight of uniform county property tax assessment practices, assessment of railroad and utilities properties, administration of insurance and alcohol taxes and annual establishment of the state’s excise tax on fuel. The bills further limit elected Board members on decisions involving personnel, budget and procurements and are prohibited from representing taxpayers in appeals and/or engaging in ex parte communications.
The newly created California Department of Tax and Fee Administration (CDTFA) takes over the administration of sales and use tax as well as a variety of other revenues including timber yield, tobacco and various environmental fees. The CDTFA will operate under California’s Government Operations Agency. It will be led by a director who is appointed by the Governor and confirmed by the Senate. The Governor will also appoint a chief deputy director and a chief counsel. David Botelho is serving as Acting Director during the transition. Until January 1, 2019, the CDTFA may enact regulations as needed to perform its functions.
Effective January 1, 2018, the State Board of Equalization’s responsibility for conducting and deciding appeals of sales and use tax assessments, personal income taxes and franchise fees will be turned over to a newly formed Office of Tax Appeals (OTA). The OTA will operate independently and will also be led by an appointed director, chief deputy director and chief counsel. Appeals panels will consist of three administrative law judges designated by the director. Panels will be located in Sacramento, Fresno and Los Angeles.
Other than the new appeal process, the reorganization is primarily a reshuffling of existing functions and personnel. HdL is working closely with the new organization to ensure that that local cash receipts are not disrupted during the transition and that local governments have input on future regulations and processes that impact their revenues. We will provide additional information and updates as they become available.
The new CDTFA website has been established. To view the latest organization charts, please click the links below:
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