BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT MAY 27, 2009 FINAL ACTIONS Reported by: Beverly D. Toms No. CSR 1662 1 1 2 P R E S E N T 3 4 For the Board Betty Yee of Equalization: Chair 5 Judy Chu 6 Vice-Chair 7 Bill Leonard Member 8 Michelle Steel 9 Member 10 Marcy Jo Mandel Appearing for John 11 Chiang, State Controller (per Government Code 12 Section 7.9) 13 Diane Olson Chief, Board 14 Proceedings Division 15 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 2 1 ITEM C1 2 Sacramento, California 3 May 27, 2009 4 ---oOO--- 5 MS. YEE: Next item. 6 MS. OLSON: We're at the end of our day. We're 7 at the final actions. 8 Our first final action is C1, Ultradent 9 Products, Inc. 10 MS. YEE: Okay. We are on item C1, Ultradent 11 Products, Incorporated. 12 Is there a motion? 13 DR. CHU: Move to adopt the staff 14 recommendation. 15 MS. YEE: Okay. We have a motion by Dr. Chu to 16 adopt the staff recommendation. 17 Is there a second? 18 I will second that motion. 19 Discussion? 20 Okay. Hearing none, please call the roll. 21 MS. OLSON: Madam Chair. 22 MS. YEE: Aye. 23 MS. OLSON: Mr. Leonard. 24 MR. LEONARD: Aye. 25 MS. OLSON: Ms. Steel. 26 MS. STEEL: No. 27 MS. OLSON: Ms. Yee. 28 Excuse me, Dr. Chu. I'm sorry. 3 1 DR. CHU: Aye. 2 MS. OLSON: Ms. Mandel. 3 MS. MANDEL: Aye. 4 MS. OLSON: Motion carries. 5 MS. YEE: Okay. Next item. 6 MS. OLSON: Next item is C2, Shirley 7 Everett-Dicko and Donald Ray White. 8 MR. LEVINE: I'm sorry, can I just clarify. 9 You don't want a memo opinion, I assume, because that 10 wasn't part of the motion. I just want to make sure I 11 understand. 12 MS. MANDEL: No, no -- yeah, I didn't -- 13 DR. CHU: Well, hold on. 14 MR. LEVINE: Just because of the way we wrote 15 the summary I need to ask you -- 16 MS. YEE: Right. 17 MR. LEVINE: -- for clarification. 18 MS. YEE: Okay, no, let's -- thank you, Mr. 19 Levine. 20 MS. MANDEL: It's really product by product 21 depending what people bring in, so -- 22 MR. LEVINE: That's correct. 23 MS. MANDEL: You know. 24 DR. CHU: I found it interesting that they 25 wanted a memorandum opinion because these products do 26 seem very unique. 27 MR. LEVINE: They didn't ask for it. That was 28 our suggestion just trying to identify cases that might 4 1 be suitable for a memorandum opinion. 2 MS. YEE: Uh-huh. 3 MS. MANDEL: Except that it's so factual. 4 MR. LEVINE: Yes. We won't be heartbroken. 5 MS. YEE: I'm not in favor of a memorandum 6 opinion. 7 DR. CHU: Yeah, let's let it stand. 8 MS. YEE: Okay. No opinion. 9 MR. LEVINE: Okay. 10 MS. YEE: Great. Thank you. 11 MR. LEONARD: On -- 12 MS. YEE: Mr. Leonard. 13 MR. LEONARD: On the question of trying to 14 define what the policy is, has Appeals done any legal 15 work as to how the law might be better written that we 16 might want to sponsor or circulate proposed legislation 17 to just help define this -- these -- these distinctions? 18 MR. LEVINE: We have not. 19 We have not. But you can see the rule we're 20 applying, if it becomes part of the tooth we're going to 21 conclude it's -- 22 MR. LEONARD: Well, clearly the Legislature has 23 a different standard for teeth than they do the rest of 24 the body. Don't know why, but they do. And clearly 25 they have a standard on prosthetics as something that's 26 not medicine or a medical device that's exempt. 27 So there's some distinctions there that they've 28 done and I -- it might be worth pointing that out to 5 1 somebody, I guess is what I'm saying. 2 I don't know if we ever write up general policy 3 discussions. I can see why you want a memo opinion, 4 because I think there's probably a lot of providers out 5 there of these types of materials and as Ms. Mandel 6 says, each one is item by item. 7 But just to alert taxpayers that their -- 8 that's -- you better check, particularly you better 9 check if you don't charge tax because without a written 10 legal -- BOE written advice you're taking a -- you're 11 taking a risk as to what the audit interpretation might 12 be. 13 MS. YEE: Perhaps other communication besides a 14 memorandum opinion. 15 MR. LEONARD: Yeah. 16 MS. YEE: Okay. We'll have the Department 17 explore that. 18 MR. LEONARD: Thank you. 19 MS. YEE: Okay. Thank you. 20 ---oOo--- 21 22 23 24 25 26 27 28 6 1 ITEM C2. 2 MS. YEE: Okay. 3 MS. OLSON: Next item, C2, Shirley 4 Everett-Dicko and Donald Ray White. 5 DR. CHU: I'd like to move the redetermination 6 and the negligence penalty, but I would like to relieve 7 a portion of the interest. I have a concern because -- 8 because, well, first of all, the D & R said that the -- 9 the postponement or the delay was due to mold. Now 10 you're saying, no, that's not the case. 11 But nonetheless when we started off you were 12 indicating, Mr. Levine, that typically it might take a 13 year or 12 months for an Appeals Conference to be 14 scheduled, and then this one was scheduled for 19 months 15 later. 16 And it just seems excessive considering the -- 17 the fact that the -- the reason for it is simply the 18 scheduling of it based on -- on when the case worker 19 can -- Case Manager can really have the Appeals 20 Conference. 21 So, I'll just throw out this in terms of how 22 much to relieve, which is that -- that you said 12 23 months and the -- the delay was 19 months. If we 24 subtract 12 from 19 that's 7 months. So I'm wondering 25 if we might relieve seven months worth of interest. 26 MR. LEVINE: We can do that easily. 27 MS. YEE: Okay. 28 MR. LEONARD: I'll second that. 7 1 MS. YEE: That motion. Okay, motion by Dr. Chu 2 to adopt the staff recommendation but to relieve 3 interest equivalent to seven months of delay. 4 Okay. Any -- without objection that motion 5 carries. 6 ---oOo--- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 1 ITEM C3. 2 MS. YEE: Next item. 3 MS. OLSON: Next item is C3, Ahmed Bahman Lari. 4 MS. YEE: Okay. Item C3, Ahmed Bahman Lari. 5 Is there a motion? 6 DR. CHU: I move to adopt the staff 7 recommendation. 8 MS. YEE: Motion by Dr. Chu to adopt the staff 9 recommendation. 10 Is there a second? 11 MS. MANDEL: Second. 12 MS. YEE: Seconded by Ms. Mandel. 13 Without objection, that motion carries. 14 ---oOo--- 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 1 ITEM C4. 2 MS. OLSON: Next item is C4, Softbyte, LLC. 3 MS. YEE: Okay. Item C4, Softbyte, LLC. 4 Is there a motion? 5 DR. CHU: I move to adopt the staff 6 recommendation. 7 MS. YEE: Okay. Motion by Dr. Chu to adopt the 8 staff recommendation. 9 Is there a second? 10 MS. MANDEL: Second. 11 MS. YEE: Seconded by Ms. Mandel. 12 Without objection that motion carries. 13 ---oOo--- 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 1 ITEM D1. 2 MS. OLSON: Our next item is D1, U. S. Business 3 Associates, Inc. 4 MS. YEE: Okay. Next item, D1, U. S. Business 5 Associates, Incorporated. 6 Is there a motion? 7 DR. CHU: I move to adopt the staff 8 recommendation. 9 MS. YEE: Okay. Motion by Dr. Chu to adopt the 10 staff recommendation. 11 Is there a second? 12 Let me second that motion. 13 Ms. Steel. 14 MS. STEEL: Mr. Levine, that they provide the 15 new invoice, right? For -- so, this is not the total 16 amount? 17 MR. LEVINE: They provided a Bill of Sale. I'm 18 not aware of invoices -- 19 MS. STEEL: I thought he got something -- 20 MR. LEVINE: He referred to an invoice but I 21 think he was referring to an invoice they already had 22 that staff had already reviewed. 23 What he provided today was a Bill of Sale 24 related to the business. I don't think there's any 25 doubt that they bought a business or we can accept that, 26 but it doesn't tell us too much. 27 MS. STEEL: You know, I go with this motion but 28 could you please check because that's what I thought I 11 1 heard from the taxpayer. So, if they provided 2 additional invoice for those cigarettes and then we have 3 to deduct from this amount. 4 MR. LEVINE: Okay. 5 MS. STEEL: But just check that. 6 MS. YEE: Okay. All right, so we have a motion 7 by Dr. Chu to adopt the staff recommendation; Yee with a 8 second, with the direction from Ms. Steel to check out 9 any additional invoices that may not have been accounted 10 for. 11 Okay. Without objection, that motion carries. 12 ---oOo--- 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 1 REPORTER'S CERTIFICATE. 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, BEVERLY D. TOMS, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 May 27, 2009 I recorded verbatim, in shorthand, to the 10 best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding 12 13 pages constitute a complete and accurate transcription 14 of the shorthand writing. 15 16 Dated: June 16, 2009. 17 18 19 ____________________________ 20 BEVERLY D. TOMS 21 Hearing Reporter 22 23 24 25 26 27 28 13