This Monday, October 28, at 10 a.m. I’ll be hosting a telephone townhall for restaurant owners. The event, co-hosted by the California Restaurant Association, will provide specific information on tax issues important to the dining and beverage industry.
Restaurants play a vital role in California’s economy, providing more than one million jobs across the state. To be successful, restaurant owners need to understand California’s complicated tax laws.
As their elected taxpayer advocate, I want to hear their concerns and answer their questions.
Those wishing to participate may register online at boe.ca.gov/townhall or by calling 916-445-3032.
Individuals who pre-register will receive a telephone call at the start of the event inviting them to connect to the townhall.
Among the many tax challenges facing restaurant owners, caterers, and food truck operators are the “80/80 Rule” and tax rates for hot and cold food, food sold “to-go,” tips and gratuity charges, beverage sales, employee meals and complimentary food and beverages.
The 2013 Legislative session has drawn to a close. Here’s an update on three key pieces of legislation I supported:
AB 576 (Perez) creates a pilot program between the Franchise Tax Board, Board of Equalization, and Employment Development Department in order to address California’s $8.5 billion underground economy. It would also allow other state agencies to share information and participate in an advisory capacity. AB 576 was signed by the governor.
AB 1412 (Bocanegra and Gatto) provides a reasonable resolution of the problem created by Cutler v. Franchise Tax Board (2012), in which the Court of Appeal found constitutional issues with the Qualified Small Business Stock incentive. Thankfully, this bill was also signed by the governor, fully reversing a controversial Franchise Tax Board staff decision to seek millions in retroactive taxes from California taxpayers.
Finally, SB 582 (Knight) would have required the Board of Equalization, Franchise Tax Board and Employment Development Department to examine how to consolidate their websites, alleviating one of the challenges most business owners face: paying taxes to three separate state tax agencies. While Governor Brown vetoed the bill, he pledged to move the idea forward anyway. Although I would have liked to see the bill signed into law, I still see this resolution as a step forward for taxpayers. I applaud Governor Brown’s commitment to this necessary policy change and look forward to working with his office to ensure it happens.
State of California Billing Fire Victims
A few weeks ago, I sent a letter to Cal Fire urging them to stop the collection of state “Fire Prevention Fee” from victims of the Clover Fire in Shasta County and the Rim Fire in Tuolumne and Mariposa counties.
In his response to my letter Cal Fire Director Ken Pimlott stated, “the Fire Prevention Fee statute, as written, provides no authority for Cal Fire to waive fees due to the loss of structures from natural disasters of any kind, nor authority to provide refunds for victims under these circumstances.”
I am disappointed Cal Fire declined my request to halt billing to fire victims. That’s why I have asked local legislators to introduce urgency legislation to waive fees and provide refunds for fire victims who have lost their homes.
I also sent a letter to my constituents affected by the recent wildfires letting them know about my plan.
I hope the Legislature will step up and protect Californians in need.
Tax Help Volunteers Needed
As you know, income tax season is quickly approaching. This year, my office is once again working with the Internal Revenue Service (IRS) and Franchise Tax Board (FTB) to help qualified individuals and families get a financial boost.
Started by the IRS, the Volunteer Income Tax Assistance program—or VITA—helps taxpayers take advantage of available tax credits. VITA volunteers trained and certified by the Internal Revenue Service will provide FREE tax filing assistance at various locations throughout the state.
Your skills can help low income individuals qualify for much needed tax assistance.
If you are interested in learning more about what it takes to become a VITA volunteer, please visit boe.ca.gov/runner/VITA .
I hope you’ll join me in supporting this valuable program.
As Property Values Rise, So Do Taxes
California has seen an upturn in property values. This is good news for many home owners. These property value gains after several years of decline are also an encouraging sign for our economy.
This positive trend has not gone unnoticed by local tax assessors, and people may have questions about their most recent property tax bill.
Generally, thanks to Proposition 13, an individual’s property tax bill can be raised only 2% each year. However, there is an exception to this rule, and many homeowners will see their values increase more than the usual 2% this year.
Proposition 8, passed in 1978, provides a way to temporarily reduce homeowners’ property tax bills if their property value decreases. Such temporary downward reassessments were common during the recent economic downturn. Homeowners who purchased their property when values were relatively high were the most likely beneficiaries of this much-needed break in their property tax.
However, as California’s housing market has improved, many county assessors have seen property values catch up to what they would have been if there had been no reduction in value under Proposition 8. In these cases, the assessor is required to increase property values up to current Prop 13 standards.
If you find yourself in this situation and believe your property tax bill is incorrect, please contact your assessor’s office. Information can be found at boe.ca.gov/proptaxes/assessors.htm.