Thanksgiving is a wonderful time to reflect on our blessings and realize that despite hard times, we in California have much to be thankful for. I am particularly thankful for the opportunity to serve as your taxpayer advocate on the Board of Equalization.Thank you for entrusting me with this privilege.
Happy Thanksgiving from my family to yours, and may God bless you during this Holiday season.
New Online Sales Tax Tool Now Available
It is important for taxpayers across California to have 100% confidence they are paying the correct amount of tax. That’s why I am pleased to announce the Board of Equalization’s new, easy-to-use online mapping toolthat will help prevent consumers from being overcharged sales tax.
I requested the creation of this system after hearing from taxpayers who were having trouble proving their correct tax rate. I’m confident it will help solve a lot of problems.
To use this tool, simply visit maps.gis.ca.gov/boe/TaxRates and enter an address. The service pin-points the location on a map and provides the sales and use tax rate at that address. It also shows the entire area where that rate applies.
Sales and use tax rates vary widely across California, and can change over time. In addition to the statewide sales and use tax rate of 7.50 percent, some cities and counties have voter approved district taxes. Multiple district taxes may also be in effect at a specific location. In fact, more than three-fourths of all businesses in the state are located, or do business, in areas with a district tax.
Using this new service, both retailers and consumers can easily find the current tax rate at a specific location. This helps to ensure they are paying the correct amount of tax.
If you would like more information about sales and use tax rates, including help for consumers who have been overcharged, visit boe.ca.gov/knowyourrate.
California’s Underground Economy a Symptom of a Much Bigger Problem
KCRA 3 in Sacramento recently aired a two part series highlighting cigarette and tobacco product smuggling in California. [View Part One and Part Two]
Tobacco and cigarette tax evasion contribute significantly to California’s $8.5 billion underground economy. In fact, we lose nearly $300 million a year due to black market tobacco products. Our numbers also show that one in five cigarettes is smuggled into the state.
While these numbers are certainly troubling, they are simply a symptom of a much bigger problem. California’s high taxes and stringent regulations not only affect our unemployment rate and business climate, they also play a key role in the size of our underground economy.
For example, a recent study by the California Foundation for Commerce and Education (CFCE) looked at the effects of the two dollar a pack tobacco tax increase being proposed in current legislation. The results of the study are grave, but not surprising.
The CFCE found that increasing the tobacco tax by two dollars a pack will not only double tobacco smuggling and related black market crime in California, it will also cause our state to lose as many as 11,000 retail jobs. It’s easy to see that more taxes and regulations lead to an increase in the underground economy, hurting businesses that choose to play by the rules.
The Legislature needs to focus on improving our state’s business climate, rather than passing legislation that will further widen the gap between those who comply and those who do not.
Fire Fee Update
The fire fee is tax policy at its worst. Ever since the Legislature enacted this illegal tax, it’s been a huge challenge for the State of California to administer.
For those of you tracking the numbers, the 2012-13 billing cycle of the Fire Prevention Fee has officially come to an end. As of mid-November more than 744,000 fire fee bills have been mailed and about $58 million has been collected. So far, more than 18,000 Californians have filed appeals challenging this year’s fee.
The fire fee class action lawsuit faced one more judicial hurdle this week as the Sacramento County Superior Court held another hearing on the merits of the litigation. The purpose of the hearing was to allow the judge to ask questions of both parties as well as take care of some procedural issues.
Despite the state’s continued efforts to derail it, I am optimistic the lawsuit against the fire fee will ultimately prevail. Keep an eye on calfirefee.com for the latest news and updates on the lawsuit and other fire fee issues.
Recent Outreach to Restaurant Owners
It’s my strong belief that in order to be successful, business owners must know both their tax obligations and the resources available to them.
That’s why I recently hosted a "Tax Help for Restaurants" telephone townhall with the California Restaurant Association where we discussed sales and use tax issues that affect restaurant owners, such as the “80/80 rule,” hot vs. cold food and mandatory tips and gratuity.
Participants had the opportunity to ask specific questions, and we had a number of great questions from restaurant owners across my district. They brought up topics such as negotiation of back taxes, catering to non-profit organizations, menu changes and how to apply tax when dealing with a common seating area.
You can also find the townhall recording, as well as additional taxpayer resources, at our Tax Help for Restaurants website at boe.ca.gov/restaurants.
Capital Fellows Programs Now Accepting Applications
The Capital Fellows Programs, run by the Center for California Studies at Sacramento State University, offer a unique opportunity for college graduates to participate in California policymaking and development all while earning graduate school credit. During the 11 month program, Fellows serve as paid full time staff members in the Legislative, Executive or Judicial branch and gain first-hand experience in the governance and leadership of the most diverse, complex state in the nation.
Voted four years (2010, 2011, 2012, and 2014) as one of the Top 10 internships nationwide by Vault.com, the Capital Fellows Programs were ranked highly for their combination of meaningful work experience and career opportunities. Each year, Vault's editors evaluate the internship programs profiled in their annual guide and select from those the top 10 internship programs they feel represent the best all-around opportunities.
Prospective Capital Fellows must have a bachelor’s degree (in any major) by September 1, 2014 and a demonstrated interest in state government and public service. Applicants may apply to one or more of the four programs that meet their interests and qualifications. Recent graduates, graduate, postgraduate and mid-career applicants are welcome. For the 2013-14 fellowship year, individuals must complete the online application by the deadline of February 10, 2014.