1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 MARCH 20, 2012 10 11 12 13 14 15 CUSTOMER SERVICES & ADMINISTRATIVE EFFICIENCY COMMITTEE 16 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 3 For the Board Michelle Steel of Equalization: Chair 4 5 Jerome E. Horton Member 6 7 Betty T. Yee Member 8 9 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per Government Code 13 Section 7.9) 14 Diane G. Olson 15 Chief Board Proceedings Division 16 17 18 For the Department: Jaime Garza Deputy Director 19 External Affairs 20 Susanne Buehler 21 Chief, Tax Policy Division Sales and Use Tax Department 22 23 24 ---oOo--- 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MARCH 20, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Olson, what's the next 6 scheduled item? 7 MS. OLSON: Our next item is the Customer 8 Services and Administrative Efficiency Committee. 9 Ms. Steel is the Chair of that committee. 10 Ms. Steel. 11 MR. HORTON: There you go. That's why we 12 should have the -- 13 Are you okay? 14 MS. STEEL: Yeah. 15 I call the Customer Service to order. And we 16 have just one item on the agenda, status update on the 17 eReg project. 18 This is exactly what they are -- you know, we 19 are moving forward for customer friendly, um, project. 20 So, um, you are doing wonderful job. And thank you very 21 much for San Diego thing. And, you know, we really 22 going forward. So give us the report. 23 MR. GARZA: Thank you very much, Ms. Steel. 24 Good morning, Chairman Horton, Honorable Board 25 Members. 26 I'm Jaime Garza, the Deputy Director of 27 External Affairs. And with me this morning is 28 Ms. Susanne Buehler; she's the Chief of the Tax Policy 3 1 Division, Sales and Use Tax Department. And Ms. Buehler 2 will be providing you with the status update and a brief 3 demonstration on the eRegistration project which is 4 designed to replace the manual paper application process 5 for registering a tax or fee payer. This is an 6 Internet-based registration system, and this is a look 7 from the applicant's perspective. 8 Ms. Buehler. 9 MS. BUEHLER: Good morning, Chair and Members 10 of the Board. I am very pleased and excited to provide 11 you with a brief demonstration of the Board's newest 12 eService eRegistration, which we also call eReg. 13 The planned implementation of this project is 14 June 18th. We are currently 89 percent complete and in 15 the user acceptance testing phase. 16 We plan to begin staff training in May. And as 17 can be expected with any change, staff is anxious to see 18 the implementation of the new system and understand how 19 their jobs will be different after we implement this new 20 service. 21 As part of the project, we have undertaken many 22 different avenues to ensure the information about the 23 project is communicated with staff on an ongoing basis 24 and provide them with the opportunity to give us 25 feedback and ask questions. To that end, we have 26 conducted focus groups in northern and southern 27 California to allow employees to provide input on this 28 system early in the design phase. 4 1 We have sent Tax Policy Division staff to the 2 districts to solicit questions and provide answers about 3 the project as it has progressed. We have conducted 4 meetings with the eService's contacts in each of the 5 districts and sections so they can disseminate 6 information within their own areas in staff meetings or 7 other meetings. 8 We have created an -- and e-mailed videos about 9 eReg. They're subject-specific, and our latest one on 10 how the training is going to occur should be coming out 11 soon. 12 We've also posted frequently asked questions 13 and their answers on the Board's Intranet and continue 14 to update them as new questions arise. 15 We've also provided presentations to the 16 district administrators and principals, showcasing the 17 eReg prototype. 18 Our eService's staff have also visited the 19 Oakland and Norwalk district offices and had taxpayers 20 walk through a prototype of the system. Taxpayers 21 provided their feedback, and we made changes to the 22 system design as well as to the look and feel. 23 External Affairs has developed an outreach plan 24 for our external stakeholders, and they will be sharing 25 that with you at a future Board meeting. 26 And lastly, we've also started with new kiosks 27 in the San Diego office -- which we're also very excited 28 about, Ms. Steel -- that provide a different experience 5 1 for our taxpayers. And they are piloting that in San 2 Diego, and we hope to also use that in other districts 3 as we learn more from using them in San Diego. 4 So let's get started with the PowerPoint. In 5 the interest of time, I will not be showing you all the 6 possible screens a taxpayer might see when registering 7 with the Board. Today I just want to give you an idea 8 of the look and feel. 9 The system is designed much like some of 10 today's income tax software on the market in that it 11 presents, on the screen for each taxpayer, questions. 12 And dependent on those questions and how they answer 13 them, they may see something different on the next 14 screen. 15 Preceding the page you see now will be a page 16 that lists everything needed to complete the 17 registration process. We do that so our taxpayers can 18 come prepared to the system. 19 Existing eClients can log in to avoid inputting 20 information the BOE already has. You see that in the 21 lower right-hand corner. 22 Applicants that are not already eClients will 23 create an eClient account prior to inputting the 24 registration information. The screens showing the 25 eClient registration are not shown in the example. 26 This slide is the main menu screen for 27 eRegistration. Nine choices are available from 28 registering a new business activity, obtaining a 6 1 California field trip permit, to registering to pay 2 taxes on the Internet purchases of cigarette and tobacco 3 products. 4 Any time you see a blue button with a question 5 mark in it, you can click on the button to get 6 additional information. 7 Today, we will walk through registering a new 8 business activity, a retail business owned by an 9 individual selling cigarettes. 10 To determine what permits and licenses are 11 required, applicants must choose what type of business 12 activity they are engaged in. If none of these 14 13 questions apply, then a permit or license from the Board 14 is not required and the system will inform the 15 applicant. 16 Since this applicant is selling cigarettes, the 17 first box labelled "selling items or goods" is selected. 18 More detailed questions will then be displayed 19 based on what was selected on the prior screen. In this 20 case, since selling items or goods in California was 21 selected, the system wants more detail on what type of 22 items or goods are being sold. This will determine if 23 licenses are required in addition to a seller's permit. 24 In this example, "cigarette and/or tobacco products" is 25 selected. 26 This next set of questions helps determine what 27 cigarette or tobacco product licenses are needed. 28 Based on the answers provided so far, the 7 1 system has determined that the applicant needs a 2 seller's permit and a cigarette and tobacco products 3 retailer license. The applicant is also informed here 4 that a $100 fee for each selling and location is 5 required for the cigarette and tobacco products 6 retailer's license. 7 The Declaration of Intent screen. The 8 applicant declares here that they intend to register for 9 the types of licenses or permits previously identified 10 on the previous screen. This replaces the wet signature 11 required on our paper applications currently. 12 Now that we know the permits and licenses that 13 are needed, the applicant fills out information 14 regarding the ownership of the business, including who 15 the owner is, his contact information, home address, 16 personal banking information and personal references. 17 Not all of the information required is shown in this 18 slide. 19 If the applicant does not have all of the 20 required information, the incomplete application can be 21 saved and the applicant can return to complete it at a 22 later time. Incomplete applications are kept by the 23 system for 30 days from the last date the application 24 was updated. 25 Information regarding the business is filled 26 out here on this screen. The taxpayer will enter the 27 business name, start date, business addresses and 28 whether the business is being bought or transferred from 8 1 another entity. 2 Here the business type is determined, any other 3 BOE accounts held by the applicant are listed, and 4 credit card process or information is recorded. 5 The business activity information is recorded 6 on this screen. The start date for the business is 7 prefilled here based on what the applicant input 8 earlier. And the applicant estimates monthly gross and 9 taxable sales, indicates what is being sold and lists 10 the suppliers. 11 Finally, we have a review screen. Here the 12 applicants can scan through all of the information they 13 input and make any necessary corrections by clicking on 14 the "edit" buttons or on the appropriate heading in the 15 ribbon. 16 Since a $100 fee is required for each selling 17 location for the cigarette and tobacco products retailer 18 license, it must be paid before the application can be 19 submitted. Payment can be made by either the eCheck 20 method or via a credit card. 21 You'll note on our current screen that we show, 22 instead of eCheck, "ACH debit." This is an interesting 23 point for us and part of the value in getting our 24 feedback from the taxpayers upfront. We found the 25 e-filing, and even in our prototype with taxpayers, that 26 most of them didn't know what "ACH debit" was, to use 27 their words. And so we're changing that to "eCheck" and 28 that's currently in our prototype now. But I thought it 9 1 interesting point on how we use feedback from our 2 taxpayers. 3 So the applicant will enter the necessary 4 information here to submit the necessary payment. 5 Here, the applicant can review the payment 6 information to verify that it is correct. And once the 7 applicant verifies the information and presses the green 8 "submit" button, the application is submitted for 9 processing. 10 This is our registration status page. If the 11 applicant passed all the validation, the reporting basis 12 and security deposit information is displayed. The 13 applicant must acknowledge this information by clicking 14 in the box. If the application requires further 15 processing by BOE staff, the applicant will be informed 16 here. 17 Once the information on the prior screen has 18 been acknowledged, the seller's permit number is 19 displayed. Also, a pop-up box appears from which the 20 applicant can view and print their seller's permit, 21 filing instructions, and other useful information. 22 When the seller's permit link is clicked, the 23 seller's permit is displayed and can be printed as seen 24 here. At any time, the applicant can log back in and 25 reprint the permit. 26 As you can see, we've eliminated the need for a 27 tax and fee payer to submit multiple paper applications 28 for their businesses. They only need to provide the 10 1 information once for a business that requires multiple 2 permits or licenses from the Board. 3 An example of this would be if we have a gas 4 station retailer who also sells cigarette and alcohol 5 and has an underground storage tank. Our current 6 process is four different applications going to separate 7 areas within the Board. With eRegistration, they input 8 the information once and it automatically is going where 9 it needs to go. And in many cases, they'll get their 10 permit and license right away online. 11 I would be happy to answer any questions you 12 may have regarding eRegistration. 13 MS. MANDEL: I have a question. 14 MS. STEEL: Ms. Mandel, questions or comments? 15 MS. MANDEL: Yeah, I -- I just have a question. 16 Um, it's on your third -- going from your 17 second slide to your third slide. So, the second slide 18 is for -- this is for anybody who's applying for 19 anything. 20 MS. BUEHLER: Right. 21 MS. MANDEL: So even like a regular retail 22 store, right? 23 MS. BUEHLER: Right. 24 MS. MANDEL: Okay. So when they go from -- the 25 regular retail guy, you might have some of these other 26 things, depending how many employees he has. But he 27 checks number one, selling items or goods in California 28 on the first slide. 11 1 MS. BUEHLER: Right. 2 MS. MANDEL: And then he goes to the second 3 slide. Um, and you guys probably have this already up. 4 But, um, there's no place for him to check "none of the 5 above." If he's just, you know, selling dresses and 6 shoes and he comes to this slide and it says "My 7 business activity includes (select all that apply)," 8 none of them apply. A lot of times when you have these 9 kinds of things, I think there's a box that says "none 10 of the above" because, as smart as everyone is, they go, 11 Well, what do I do? Leave everything blank? Hit 12 "next"? Am I in the wrong, um, application somehow? 13 So I don't know if it's too late to think about 14 a "none of the above." 15 MS. BUEHLER: It may be something that we have 16 to consider for phase two, but we'll take it back and 17 ask. 18 MS. MANDEL: Okay, thanks. That was my only 19 question. Otherwise, it's very nice to know that people 20 can do this online. They can get everything they need 21 in one place. 22 MS. STEEL: Thank you. 23 Any other comments or questions? 24 MR. RUNNER: Quick question. 25 MS. STEEL: Yeah. 26 MR. RUNNER: Um, yeah, I think this is a great 27 step. And obviously the more we can help guide people, 28 not only to help get their work done as they're going 12 1 through it from home, or as they walk to a kiosk, but 2 also prompting them toward other kinds of permits and 3 whatnot would be very -- will be very helpful. 4 Um, let me -- my question is actually, um, one 5 of outreach then. What is our intention in regards to 6 communicating this, uh, and our ability to reach out? 7 Because it seems to me an interesting challenge we have 8 is that we're trying to in -- in -- in some ways reach 9 out to people who we don't have a relationship with 10 right now, and guide them to this opportunity. 11 So, how do we see our outreach effectively 12 doing that? 13 MR. GARZA: Well, what we're looking at right 14 now, Mr. Runner, is basically looking at some 15 eCampaigns, what we're calling "Life Just Got Easier 16 With eReg." Our goal, of course, is making this 17 process, as you folks have seen, much more streamlined. 18 So what we're trying to do is a campaign ahead 19 of time where we will start to send eBlasts out to our 20 practitioners and other folks to inform them that we've 21 got this new process coming up. 22 We also have some, uh, 30-second and one-minute 23 videos that explain what we should do to get ready for 24 this. And this is going to be used not only for 25 external but internal, because we want our BOE employees 26 to get just as excited about it. 27 So we're in the preliminary stages of 28 finalizing some of those materials and looking at 13 1 specific targets as to how we're going to get that out 2 so that folks can start talking about it at our district 3 offices, so we can have our auditors and assessors also 4 be aware that this is coming up as well. 5 MR. RUNNER: You know, there's often times a 6 lot of conferences dealing with, for instance, people 7 who are opening -- interested in opening up a franchise 8 or those kind of things that people can go to, start 9 your own business, start your business, those kinds of 10 things. 11 Um, traditionally, what kind of presence do we 12 have at those? Um, and it would seem to me in one way 13 that those would be the kind of folks that we're trying 14 to reach out to, and that is those who might be 15 unfamiliar with kind of the practical side of what 16 they've got to do in order to build that relationship. 17 They understand they want to get into business, they 18 want to buy this franchise, but they don't know exactly 19 what that means in terms of the -- the actually getting 20 of the permit. 21 MR. GARZA: Right. I don't have an answer for 22 you. And I can get back to you on that. But I know 23 that when we do our outreach events, whether it be a 24 faith-based event, things like that, those are the 25 opportunities we can use to let people know what we're 26 doing. 27 MR. RUNNER: Yeah, I guess my point is, I'm not 28 sure -- I'm not sure -- if we need to keep going to our 14 1 events, or if we need to go to other people's events. 2 MR. GARZA: Right. 3 MR. RUNNER: You know what I mean? Because, 4 again, people who are going to come to our events are 5 coming to our events because they know us. 6 I'm interested in seeing what -- maybe if we 7 can look at who's -- who's already out there who are 8 having events that we go to. Um, and there's got to be, 9 you know, scores of groups out there helping people know 10 how to start a business. 11 Uh, and -- and so I would just think that maybe 12 those -- if we could look for leads like that, because 13 that's going to be help -- steering people to this is 14 what we want to try to figure out how to -- how to -- 15 how to do. 16 So, just some thoughts on that. 17 MR. GARZA: No. Thank you, sir. 18 MR. RUNNER: Thank you. 19 MS. STEEL: Anymore comments? 20 I have a question. You know, how about 21 Miss Runner's -- Mr. Runner's, um, question that, you 22 know, we can put on the BOE website, because when you 23 start a business usually you going into the website. So 24 front page, that you want to apply online first, you 25 know, uh, seller's permit, that's really good. 26 And then, you know, usually when, um -- when I 27 going to any website, try to log in, user's ID and then 28 password, I get stuck there. And then I go, no more 15 1 from there. 2 So I have to call them and try to figure out, 3 well, what's my password and, you know, what, you know, 4 my ID. 5 So how -- what's the step for setup? How -- 6 how -- how long is it? It's like a first, second and 7 then, you know, try to set up for a new login -- 8 MS. BUEHLER: If you've forgotten your 9 password, we have questions that were chosen when you 10 first set up your password. Like, what was your maiden 11 name? Or, where did you go to high school? So we will 12 prompt you with those cues. And if they -- if you were 13 providing the correct answer there, then we will send 14 you your new password. 15 MS. STEEL: But what taxpayers need to set it 16 up from the first time? 17 MS. BUEHLER: It's basic personal information 18 from you. I didn't bring that screen with me, but I -- 19 I can certainly send that to the Members. 20 MS. STEEL: Okay. And then, uh, driver's 21 license there that -- do you need a copy of the driver's 22 license? 23 MS. BUEHLER: No, we do not. 24 MS. STEEL: Or you just put those? 25 So if it's incomplete, uh, most of times that 26 when they just put their driver's license informations 27 and then they going to come out. 28 You say you can print out this seller's permit 16 1 any time you want. How long it's going to be there, 2 until as long as they keep the business or -- 3 MS. BUEHLER: It will be there in history. We 4 don't have plans to delete at this time. 5 MS. STEEL: I see. Thank you very much. And 6 thank -- 7 Okay. Mr. Horton. I am not myself today. So, 8 Mr. Horton. 9 MR. HORTON: Thank you, Madam Chair. 10 Is this in different languages as well? In the 11 Norwalk office we have a, uh -- a pretty extensive 12 Latino population. 13 MS. BUEHLER: Currently what's coming live is 14 in English. However, we are providing all of our office 15 with translated, uh, pages of where you have the 14 16 questions about your business, the initial screen. That 17 will be translated and provided in each of the offices 18 so that when we do have someone who English is their 19 second language, they will be able to choose one that 20 appropriately fits them, so they would be able to see 21 the translation. 22 MR. HORTON: Okay. Just a recommendation to 23 Mr. Garza is that most businesses when they first get 24 started, the one thing that they all seem to -- to -- to 25 note is that they have to file a fictitious business 26 name, typically to open up a bank account and so forth 27 and so on. 28 MR. RUNNER: Yeah, good point. 17 1 MR. HORTON: And that information's required to 2 be published. And we can gain access to that, uh, and 3 use that as part of our outreach efforts. 4 MR. GARZA: Thank you. 5 MR. HORTON: Thank you. 6 MS. STEEL: Anymore comments? 7 Thank you very much. That concludes my, uh, 8 committee meeting. Thank you. 9 ---oOo--- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 March 20, 2012 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 pages 1 13 through 18 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: April 3, 2012 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 19