1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 APRIL 26, 2012 10 11 SALES AND USE TAX APPEAL HEARING 12 APPEAL OF 13 JAY NEWMAN 14 NO. 571504 (AC) 15 AGAINST PROPOSED ASSESSMENT OF 16 SALES AND USE TAX 17 18 19 20 21 22 23 24 25 Reported by: Juli Price Jackson 26 CSR No. 5214 27 28 1 1 2 P R E S E N T 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Michelle Steel Vice-Chairwoman 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 Joann Richmond Chief 15 Board Proceedings Division 16 17 For Board of David Levine Equalization Staff: Staff Counsel 18 19 For Department: Erin Dendorfer Tax Counsel 20 Kevin Hanks 21 Chief, Headquarters Operations Division 22 Robert Tucker 23 Legal Department 24 25 For Petitioner: Jay Newman Taxpayer 26 27 ---oOo--- 28 2 1 `````5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 APRIL 26, 2012 4 ---oOo--- 5 MR. HORTON: Welcome back to the meeting of the 6 Board of Equalization. 7 We have to conduct a quick re-audit. 8 Ms. Richmond, what is our next scheduled 9 matter? 10 MS. RICHMOND: Our next item is C22, Jay 11 Newman. 12 Please come forward. 13 MR. HORTON: Mr. Levine, would you please 14 introduce the issues as the taxpayer comes forward? 15 MR. LEVINE: The issue in this petition and 16 claim for refund of Jay Newman is whether further relief 17 of interest is warranted. 18 MR. HORTON: When Mr. Newman has settled in, we 19 would ask that he or his representative introduce 20 themselves for the record. 21 And they are allowed ten minutes to make their 22 presentation. 23 MR. NEWMAN: Thank you. I'm Jay Newman. I'm 24 the taxpayer and I will be representing myself in this 25 matter. 26 I think basically I'd like to start off with a 27 brief history of the events. In October -- October 2004 28 I purchased a piece of artwork from Italy. This artwork 3 1 had been something that I had seen on a recent trip and 2 had returned from Italy that summer and commenced 3 negotiation and finally agreed on a price and charged it 4 to my American Express. 5 The artwork arrived in November, November 17th 6 of 2004, about a month later and I picked it up at 7 Customs. It arrived by air freight. I picked it up at 8 Customs at LAX. Paid the federal import duties on it. 9 And took it home. 10 And to this day it hangs in my house. And it's 11 a tremendous amount of enjoyment for me. 12 What I did not know at the time, and 13 subsequently learned, is, I guess, there is a use tax 14 that is owed for any type of purchase that you make 15 outside the State or overseas. And I first heard about 16 this use tax approximately five years later, five years 17 being on August 12th of 2009. 18 So, the artwork arrived in the United States in 19 October 2004. And really five years later, August 2009, 20 I receive a notice. And I then proceeded to contact the 21 State Board of Equalization to better understand why I 22 was being taxed on something I purchased in Italy. 23 And I found it to be pretty interesting, I'll 24 call it cocktail conversation, with friends. And just 25 in my life I interact with a lot of politicians, 26 sophisticated business people, lawyers. And I started 27 telling this story about the use tax I was being 28 charged. And they all were unaware of it. 4 1 And to me it was shocking that something that I 2 guess is so standard is something that so few people 3 understand. And as a result, I was born -- back up for 4 a second. I was born and raised in California, 1956. I 5 have lived here all may life. I have gone to college 6 here, I've gone to grad school here. I work here. I've 7 raised my family here. I even brought my wife here from 8 Kentucky -- but I did not pay a use tax on her. 9 So, in any event, it's -- I've always paid my 10 taxes since I started working as a teenager. I've never 11 had any issues with any tax authority. 12 And, as a result, I -- once I got a handle on 13 what the use tax was and once I was able to work with 14 the State Board about the right amount of the use tax, 15 because was being charged for things were probably not 16 appropriate for use tax, I paid it immediately. I paid 17 it with all of the interest that was being charged. 18 And I thought it was really inappropriate to be 19 charged that interest, especially for the State to 20 benefit by the fact that the enforcement procedure or 21 enforcement process, was, in my mind, is very lax. I 22 mean, five years later to first be contacted about this. 23 So, really, the nature of my appeal, of my 24 petition is from an unreasonable standpoint. I don't 25 understand why the State waited so long and then they 26 get the profit by waiting so long, by charging the 27 interest. It's an interesting business model. 28 I think this is something that is not very well 5 1 publicized, not very well known, and that's why I, 2 through this cocktail chat, was canvassing people. No 3 one's aware of it. 4 What's also really, I think, disconcerting to 5 me as a taxpayer is the fact that this is easily 6 publicized. For example, I just flew to Vancouver on a 7 vacation and I received my Customs form as I was 8 returning to the United States. There's forms at the 9 airport. I'm not sure why there aren't forms at Customs 10 when you go and pick up an item that you pay federal 11 duties on in the City of LA, in the State of California, 12 but yet there's no information about this. 13 There could be a handout. There could be a 14 form. It seems it's very manageable to provide 15 taxpayers, especially law abiding taxpayers, who do the 16 right thing and want to do the right thing to avoid 17 this. 18 So, I'm not disputing the tax, what I'm 19 disputing is that I'm be charged interest on the tax 20 that had been charged to me five years later. I think 21 that is reasonable. I think it's inequitable. And I 22 think it's not in the State's best interests. 23 I don't enjoy what is transpiring here in the 24 State with the deficits we're running and the fact that 25 tax collections, in some cases, are not being -- that 26 the State isn't able to collect all of the taxes that 27 are due. 28 And maybe they might be able to collect a lot 6 1 of those taxes if people had better information, better 2 notice. And that's where I'm coming from. 3 I realize some people will not pay taxes. And 4 you have to pursue them. But the people who are 5 taxpaying, if you give us the information, if you 6 publicize it in a very simple manner, we'll pay it. And 7 it could have been easily done at Customs when I paid my 8 import duties for the federal government. There's no 9 reason I shouldn't pay them for the State government. 10 Thank you. 11 MR. HORTON: Thank you very much. 12 The Department will have ten minutes to make 13 their presentation. Please commence with your 14 introductions, please, for the record. 15 MS. DENDORFER: Mr. Chairman and Members of the 16 Board, I'm Erin Dendorfer from the Board's Legal 17 Department, along with Robert Tucker and Kevin Hanks 18 representing staff. 19 We occur (verbatim) with the Appeals Division 20 recommendation with respect to all issues in this 21 matter. 22 Petitioner concedes that he owes use tax on a 23 painting purchased in Italy in 2004, but argues that he 24 should not be held liable for the interest. 25 In this case the interest accrued because 26 Petitioner did not report his use tax liability on his 27 2005 California State income tax return or report and 28 pay the tax to the Board. 7 1 The Department issued the NOD in November of 2 2009, well within the eight-year statute of limitations 3 that is applicable here. Based on the specific facts of 4 this case, staff has conceded three of the five years of 5 interest. As to the remaining interest, there was no 6 unreasonable error or delay by the Board. Accordingly, 7 we request that the petition for redetermination and 8 claim for refund be denied. 9 Thank you. 10 MR. HORTON: On rebuttal, sir? 11 MR. NEWMAN: Yes, I don't know how you define 12 "unreasonable." I believe that to wait five years is 13 unreasonable. 14 And I appreciate the fact that the period from 15 two years after the NOD was issued to that fifth year 16 the interest has been waived or forgiven, but I still 17 believe that it's even -- it's unreasonable to wait two 18 years. 19 I think this is something that is easily 20 disclosed to taxpayers, such as myself, at Customs, 21 recognizing that people go there, pick up their -- 22 whatever they're importing and the federal government 23 notifies you of the tax and provides you with the basic 24 information. 25 There is no reason the State can't do the same. 26 I think it would be in the State's best interests to do 27 just that, 'cause there'd be a much better chance that 28 we wouldn't be allocating the State resources as we are 8 1 today because people, such as myself, would be paying 2 the tax right on the spot. And we could avoid the use 3 of your time and the State Board of Equalization's time 4 and my time. 5 But there's no reason why even two years, in my 6 opinion, is reasonable. I disagree that two years is 7 a -- is not unreasonable. I think it's completely 8 unreasonable. This should have been handled at Customs. 9 Thank you. 10 MR. HORTON: Thank you very much. 11 Discussion? Member Yee. 12 MS. YEE: Thank you very much, Mr. Chairman. 13 I'm going to see if the Department can respond 14 to this. This Board, as part of its effort to reduce 15 the tax gap, has approved, I think, several budget 16 augmentations to try to address the use tax collection 17 with our US Customs program. 18 I was under the impression that it was a little 19 bit more real time with respect to use tax collection 20 with Customs than what's kind of being portrayed here, 21 in this matter before us. 22 After just having come back from an 23 international trip, I can say there's not a whole lot of 24 information when you go through Customs about California 25 use tax. But I do pay it. 26 But it is -- I guess I want to know -- and you 27 may not be able to answer this maybe with our budget 28 chop -- but what exactly these augmentations that we've 9 1 been approving at the Board level are going towards? 2 It just seems like a significant period of time 3 that passes before we are able to get the use tax 4 dollars in. 5 MR. TUCKER: I'll -- Ms. Yee, I'll start and 6 then if -- assuming I get correctly, if I say anything 7 wrong, Ms. Dendorfer can -- can correct it. 8 But there are two different types of Customs 9 programs. We have one Customs program for hand carried 10 items. In fact, there's an exemption for -- 11 MS. YEE: $800. 12 MR. TUCKER: At present, it's 800, initially it 13 was 400. 14 MS. YEE: Right, exactly. 15 MR. TUCKER: So, there are two different 16 Customs programs. 17 This was, I believe, part of -- I want to say 18 Tax Gap II, this specific Customs program. And it looks 19 to not the property that's hand carried into the United 20 States, but actually property that is shipped into the 21 United States. So, it's -- it's very different. 22 In the beginning there was an -- it was part of 23 a pilot program. There was a limited staff. In fact, 24 there was only one staff person because it wasn't -- at 25 the time it wasn't known whether or not this information 26 would be fruitful. It was simply we had an incredibly 27 large amount of data and then we had to take that data, 28 process that data and then compare it back to what had 10 1 been reported by these individuals. 2 Rather than just indiscriminately issue a tax 3 bill, we wanted to first determine whether or not 4 someone has paid it because it would make no sense just 5 to simply take that information shotgun. 6 So, it was just the fact that we had limited 7 resources, a small number of personnel. Once it was 8 determined that the program was bringing results and 9 that we were finding some unreported tax, then it was 10 expanded at a later period 11 MS. MANDEL: I have a question. 12 MS. YEE: Do you have you a sense, Mr. Tucker, 13 of what kind of outreach or information we have done 14 relative to the Customs' two programs? 15 MR. HANKS: Ms. Yee, the outreach is something 16 that we're particularly mindful of. As you know, the 17 use tax component of Tax Gap is a significant one. And, 18 so, it's a message that the Sales and Use Tax Department 19 is attempting to communicate to purchasers in the State 20 of California. 21 We've involved in issuing news releases. 22 Certainly we have information that we're issuing to even 23 our registered permitees, who are confused about the 24 application of use tax and when it properly applies. 25 In the instant matter that we're looking at, 26 the gentleman purchased property, came through Customs. 27 We don't have a contract, per se, that allows us to be 28 at the airport and hand out information relative to use 11 1 tax purchases through this federal department. 2 And I think that's probably -- and perhaps it's 3 something we need to look at, but I think we're also 4 mindful that the majority of purchases of items that 5 people are hand carrying into California are not subject 6 to use tax because you are not meeting that $800 7 threshold. 8 However, to the extent that -- that the 9 information is reported to Department of Customs and 10 then relayed to our Centralized Collection Section in 11 headquarters, we are reviewing that information, as 12 Mr. Tucker indicated, and attempting to match that and 13 then cross-match that with the amounts of use tax that 14 ultimately gets reported on an income tax return. 15 But because of that -- because there's a time 16 delay between the time of the purchase -- if you make a 17 purchase in January of this year, for instance, you're 18 not going to file your income tax return until 19 April 15th of the following year. There's a long time 20 delay between the period of time of purchase, the period 21 of time you report that potential purpose -- purchase to 22 Franchise Tax Board. And then for them to even share 23 that information with Board of Equalization just -- just 24 takes a period of time. 25 MS. YEE: No. And I understand that delay in 26 terms of reporting. 27 What about the delay in terms of getting data 28 from US Customs? 12 1 MR. HANKS: And that data is supplied to us on 2 a regular basis. 3 MS. YEE: How regular? 4 MR. HANKS: And I believe Ms. Dendorfer has 5 that -- that frequency. 6 MR. HORTON: I am sorry -- does that complete 7 your response to -- 8 MR. HANKS: Yes, I believe that Ms. Dendorfer 9 had actually talked to our folks in the Customs office. 10 MS. YEE: Yeah, I'm curious about how often we 11 get this data? 12 I mean, obviously, there's a great span of time 13 that elapsed here. And I just want to understand a 14 little bit more clearly about the regularity with which 15 we get information and then are able to more timely 16 issue our notices. 17 MS. DENDORFER: We receive the information from 18 Customs quarterly. But that information is downloaded 19 once a year, after the April 15th tax deadline to 20 account for people to self report on their income tax 21 returns. 22 And generally it's not downloaded until 23 November to account for people who file extensions in 24 their taxes. 25 MS. MANDEL: Question. 26 MS. YEE: Thank you. 27 MR. HORTON: Member Runner, Steel, then 28 Ms. Mandel. 13 1 MR. RUNNER: Thank you. 2 Yeah, real quick. Obviously, you know, we've 3 struggled with use tax. And certainly five, six years 4 ago we really struggled with use tax. 5 And, so, where we're at at this point, I think, 6 is trying to figure out how to communicate that and 7 communicate that well and how it is that we get that -- 8 that message out. And I think that it is a challenge. 9 Let me just ask in regards to that question, in 10 regards to time, just procedurally -- maybe -- maybe 11 this is something that we just need to kind of get some 12 information back on -- but is what you're telling me, we 13 get quarterly reports, but we don't actually indicate to 14 the taxpayer that they may have a use tax obligation 15 until maybe 18 months or 24 months, in that scenario, 16 because if they came across, we waited for their April 17 filing and then we waited for the November extensions -- 18 we don't actually go back to after their federal income 19 taxes are reviewed before we would actually say that 20 they may have an obligation? 21 MR. TUCKER: What we're looking at are their 22 franchise tax returns, where they have the opportunity 23 to report their use tax. 24 MR. RUNNER: Right, right, I get that. 25 MR. TUCKER: So, we look at the -- as Mr. Hanks 26 explained, we look at the calendar year -- 27 MR. RUNNER: Right. 28 MR. TUCKER: -- and then wait until we get the 14 1 franchise tax return for that calendar year. 2 MR. RUNNER: Right, right. 3 MR. TUCKER: And then compare it to the US 4 Customs information. 5 MR. RUNNER: Right, which again -- I'm just in 6 my head, that could be 24 months away, right? 7 MR. TUCKER: I believe -- well -- 8 MR. RUNNER: Could be 18 months -- 18 months at 9 the minimum with the extension filed and then -- 10 MR. TUCKER: Right. 11 MR. RUNNER: -- I assume some time passes? 12 MR. TUCKER: Assume -- assuming there were 13 purchases in January. 14 MR. RUNNER: I mean -- I mean, so, the answer 15 is no, we do not get that information from Customs and 16 then notify that there's a potential obligation? 17 We wait to see if they actually report that 18 obligation on their own? 19 MR. TUCKER: Correct. 20 MR. RUNNER: Could that -- I mean -- okay. 21 And then -- and then what we do, because, 22 again, it's an interesting issue, because then this is 23 an issue to which many people don't understand, once we 24 tell them, now they owe penalty and/or interest, rather 25 than -- rather than notifying them during the time when 26 they would owe no interest, which would be when we get 27 the customer's report after that one quarter. 28 We can say -- and like informing them, "Here 15 1 are the different ways you could pay your use tax." We 2 wait 'til after they -- we know that they didn't pay it. 3 Is that fair? 4 MR. TUCKER: I think that's a correct 5 statement. But I think that's what we do for virtually 6 all -- all taxpayers. Typically we don't inform them of 7 their liability before it arises. 8 MR. RUNNER: Well, again, I would -- I would -- 9 I would contend that actually use tax is one of those 10 issues to which people don't understate. 11 And as -- 12 MR. TUCKER: I agree. 13 MR. RUNNER: -- a result of that, I think it 14 has -- it should -- we need to go beyond how we think 15 people understand about tax. 16 I mean, I think clearly people understand 17 income tax, tax dues, backdates that way. 18 I would submit that especially on the Customs 19 side, purchasing large items, people don't under -- 20 there's a lot of people who don't understand. And it's 21 very hard for us to educate them. 22 We can -- we can write all the news articles we 23 want and whatnot, but until you actually are reading 24 that particular news article, you are not being 25 educated, you know, at that point. You're -- you're 26 not. 27 Okay. Well, I would submit that that might be 28 something we may want to review. 16 1 MR. HANKS: We definitely will. 2 MR. RUNNER: Because rather than waiting to get 3 -- it's almost like a "gotcha," it appears to me in that 4 regard. 5 Let me just ask again -- and what -- let's see, 6 did I understand that the -- that we waived two -- we 7 waived three years? 8 And we waived three years out of the five 9 because -- 10 MR. TUCKER: This was a close call. 11 MR. RUNNER: It was a close call to waive all 12 five or close call to -- 13 MR. TUCKER: No, no, just to waive the three. 14 It was simply -- we were operating with very 15 limited resources. I think they gave the taxpayer the 16 benefit of the doubt in this circumstance. 17 We -- as I said, we only had one individual 18 working. They were only able to process the high dollar 19 volumes. This was not one of the high dollar volume 20 purchases. And it was simply -- they were trying to be 21 most economical in their use of resources. 22 MR. RUNNER: Let me ask taxpayer real quick -- 23 once you received and you were educated -- 24 MR. NEWMAN: I paid it. I paid in full. Paid 25 all the interest. 26 MR. RUNNER: Paid everything? 27 MR. NEWMAN: Of course. 28 MR. RUNNER: You paid everything in full -- 17 1 MR. NEWMAN: As I always do. 2 MR. RUNNER: -- as soon as you were educated? 3 MR. NEWMAN: Absolutely. I mean first -- then, 4 yeah, absolutely. 5 MR. RUNNER: Okay. 6 MR. NEWMAN: Can I make a comment? I know it's 7 probably -- 8 MR. RUNNER: Real quick, real quick. 9 MR. NEWMAN: -- policy -- policy. 10 You have a contract with Customs. So, you -- 11 so, you obviously got the data, right? You went that 12 far to get the data. 13 Then let's -- because I'm a taxpayer, I hate 14 the fact that this State is mortgaging my -- my kids' 15 future here because we can't pay our bills. And people 16 like me will pay. But we need to know that we have an 17 obligation to pay. 18 And if you can go as far and get a contract 19 with Customs then, obviously, you can negotiate with 20 them to either post a notice -- 21 MR. RUNNER: Let me -- let me -- let me go to 22 that point real quick. 23 In terms of the -- again, not the hand cary, 24 handcarry, obviously, is something that, you know -- and 25 there is this huge exemption, lots of confusion around 26 that. 27 But things that are shipped in through Customs 28 to be picked at Customs, do we -- what is our -- do we 18 1 have anything in place that -- a brochure, information 2 to taxpayers -- in regards to that when people then go 3 and go into that office? 4 MR. HANKS: Mr. Runner, that's a great 5 question. 6 Actually, we do have the information that we 7 can share with taxpayers relative to their use tax 8 obligation if they visited any Board office. 9 MR. RUNNER: No, no, that's not my question. 10 MR. HANKS: But -- but, no, I realize that 11 because they don't know, obviously, to come and visit 12 us. 13 MR. RUNNER: Right. 14 MR. HANKS: So, I think the information that we 15 try and convey to taxpayers throughout the state is use 16 tax obligation exists. We attempt to put news 17 articles in newspapers -- 18 MR. RUNNER: Hold on, I appreciate it, but my 19 question was much -- very specific. 20 And that is, what do we do at the Customs when 21 people go ahead and get their stuff, do we have anything 22 there that we may -- have we had any discussions with 23 Customs in regards to being able to post -- give out a 24 brochure, any information in regards to potential tax 25 liability that the individual may have? 26 MR. HANKS: I see. I'm not certain if -- if 27 we've had that communication with Customs. 28 I know that we've got similar types of 19 1 arrangements with various truckstops -- 2 MR. RUNNER: Right. 3 MR. HANKS: -- on the borders of California. 4 MR. RUNNER: Okay. 5 MR. HANKS: So, to the extent that -- that we 6 do that. 7 MR. RUNNER: It seems to me that's something we 8 may want to look into. 9 MR. HANKS: Absolutely. 10 MR. RUNNER: Okay, thank you. 11 MR. NEWMAN: I would support that as a taxpayer. 12 MR. HANKS: Thank you. 13 MR. HORTON: Member Steel. 14 MS. STEEL: Well, news articles are good, but 15 how many people want to read about taxes, you know, 16 begin with -- unless you are sitting here and then you 17 are crazy about taxes, like us. 18 And then limited resources, I mean, that's not 19 really fair for the taxpayer -- taxpayers that, you 20 know, it takes five years. 21 The earliest we can do is about two years 22 because after they file the extension and all these, and 23 it took another three years. 24 So, I understand that we waived that three 25 years of interest. I want to see that this interest was 26 accumulated from when? When he bought it? Or when 27 he -- he's due of April 15th, that tax return? 28 MS. DENDORFER: As the D & R states on 20 1 footnote 6, interest began accruing after the close of 2 the fiscal year in 2005. 3 So, it was after the tax should have been 4 reported on the Franchise Tax Board return. 5 MS. STEEL: So, when? Which date? 6 MS. DENDORFER: August 1st, 2005. 7 MS. STEEL: So, it was after that his tax 8 return is done? 9 MS. DENDORFER: Right. 10 MS. STEEL: Okay. You know, Mr. Chairman -- 11 MR. HORTON: Yes. 12 MS. STEEL: -- that from my committee, Customer 13 Service, I want to change the policy for -- I want to 14 consider a change in policy in my committee. 15 Because this is not really fair for the 16 taxpayers. So, I want to fix this. 17 So, that's my last comment. 18 MR. HORTON: Thank you. I would concur 19 relative to the discussion here today. 20 There is a timeline in which we have some 21 information that would cause us to have some concern. 22 And to the extent -- to that point in time that we have 23 concern, we should at least begin the process of 24 informing and educating the taxpayer about the potential 25 liability so they can adequately do the research -- and 26 particularly given, you know, the historical treatment 27 of this. 28 With that said, you know, I do believe that the 21 1 Department has done a yeoman's job in getting the word 2 out there to the extent that we have the capacity to 3 communicate to 33 million individuals, who are all 4 subject to having to -- a potential use tax liability. 5 It's just extremely, extremely expensive for 6 the State and the legislature hasn't allocated that 7 funding yet. 8 But we do have a responsibility to the 9 taxpayers of the State of California to notify them at 10 the earliest possible stage and, again, that education 11 process. So, I would welcome that. 12 And with that said, Ms. Mandel 13 MS. MANDEL: No, that's okay. I think 14 everybody may have covered it because if this comes up 15 in Ms. Steel's committee we'll have the information 16 about how many -- you know, how big those reports are 17 and how you would approach it, et cetera, and what you 18 can do with Customs on the front end and that sort of 19 thing. 20 Thanks. 21 MR. HORTON: In regards to the case, is there 22 further discussion, Members? 23 Is there a motion? 24 Oh, yeah, is there a motion? 25 Sorry, we've been moving so rapidly these 26 days. 27 MS. YEE: Move to take the matter under 28 submission. 22 1 MR. HORTON: Moved by Member Yee to take the 2 matter under submission, second by Member Steel. 3 Without objection, such will be the order. 4 Thank you very much for appearing before us, 5 for a number of reasons. And, so, we want to thank you 6 for sharing your thoughts in this regard as well as the 7 ideas to improve our policy. 8 The Board will take your matter under 9 consideration later on this evening and send you a 10 written report of our decision. 11 MR. NEWMAN: Thank you for your time. 12 ---o0o--- 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 1 REPORTER'S CERTIFICATE. 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 APRIL 26, 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 23 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: MAY 17, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 24