1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JUNE 26, 2012 9 ITEM G TAX PROGRAM NONAPPEARANCE MATTERS - CONSENT 10 G1 LEGAL APPEALS MATTERS 11 12 13 14 15 16 17 18 19 20 Reported by: Juli Price Jackson 21 No. CSR 5214 22 23 24 25 26 27 28 1 1 P R E S E N T 2 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 13 Government Code Section 7.9) 14 15 Joann Richmond Chief, Board 16 Proceedings Division 17 18 For the Staff: Jeff McGuire Deputy Director 19 Sales and Use Tax Department 20 21 22 ---oOo--- 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JUNE 26, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS, RICHMOND: Our next item is G1, Legal 7 Appeals Matters consent. These items are to be taken in 8 one vote. 9 MR. HORTON: Members, would you like to note 10 any nonparticipation or pull any items for further 11 review? 12 Hearing none, is there a motion to take all the 13 up? 14 MS. YEE: So moved. 15 MR. HORTON: Moved by Member Yee to take all 16 the items before us up. Second by Member Steel. 17 Without objection, such will be the order. 18 Adopt staff -- excuse me, strike that -- move to adopt 19 staff recommendation -- 20 MS. YEE: Right. 21 MR. HORTON: -- on all items, without 22 objection, such will be the order. 23 MS. YEE: Mr. Chairman. 24 MR. HORTON: Strike that, let me do it again. 25 The motion is to adopt staff recommendation on 26 items 1 through 6 by Member Yee, second by Member Steel. 27 Without objection, Members, such will be the 28 order 3 1 Member Yee. 2 MS. YEE: I wanted to see this -- there are a 3 couple of items, sub items under this item, that I 4 wanted to just see if we could get a Deputy Director's 5 report from Mr. McGuire with respect to catering trucks 6 and food trucks. 7 MR. HORTON: Sure. 8 MS. YEE: I want to just get a sense of how 9 we're dealing with some of the allegations that are 10 flying around out there about how they're being treated. 11 MR. HORTON: Sure. Mr. McGuire, that's sort of 12 a hint for you to moving towards the aisle. 13 MS. YEE: And, actually, I don't even need it 14 now, but for a future -- a future Board meeting. 15 MR. HORTON: Let's just share our thoughts 16 with -- 17 MS. YEE: Okay. 18 MR. HORTON: -- him. 19 MS. YEE: Okay, all right. 20 MR. HORTON: We don't have this luxury all the 21 time. 22 MS. YEE: Okay. 23 MS. STEEL: Mr. Chairman. 24 MR. HORTON: Yes. 25 MS. STEEL: Can we add that, you know, maybe 26 policy changed to 1652, that the -- what they call the 27 catering service, those trucks, are going in what they 28 call that -- the house? 4 1 MR. HORTON: 6015 retailers? 2 MS. STEEL: 60 -- you know, they're the one 3 paying sales taxes -- 4 MS. YEE: Right. 5 MS. STEEL: -- instead of those. So, maybe we 6 can revisit for that policy change. 7 MR. HORTON: Okay. Member Steel, he's here. 8 MR. McGUIRE: I'm here. 9 MR. HORTON: Ms. Steel's articulated a concern 10 about the 6015 retailers, wherein we hold the catering 11 house -- 12 MS. STEEL: 1562 or 1652 -- 13 MR. HORTON: -- is the one where we hold -- 14 MS. STEEL: -- they're the ones responsible -- 15 MR. HORTON: -- the catering house responsible 16 for -- for controlling the sales so forth? 17 MR. MC GUIRE: There is different situations 18 with catering trucks. A lot more of them are 19 independent or attached to restaurants nowadays than 20 just working through a single catering house. 21 To be honest with you, I don't want to give you 22 the wrong answer. I'm not sure that we've made the 23 catering houses all 6015 retailers. 24 In that situation a 6015 retailer is where the 25 catering house actually collects the tax at the retail 26 price before they give the merchandise to the catering 27 truck. For instance, that's how it would work like with 28 Avon retailers, where Avon collects the tax and then the 5 1 independent distributors then don't have to actually get 2 registered and report the tax. 3 But I'm not sure that we have that consistent 4 with the catering houses, but I can definitely follow up 5 on that. 6 MS. STEEL: We can study that. 7 MR. MC GUIRE: Yeah. 8 MS. STEEL: Yeah. 9 MR. MC GUIRE: 'Cause it's your suggestion that 10 we make the catering houses 6015 retailers? 11 MS. STEEL: Right, right. 12 MR. MC GUIRE: Okay. 13 MS. STEEL: Because -- 14 MR. MC GUIRE: 'Cause I didn't think that we 15 had that many. 16 MS. STEEL: -- a lot of trucks in Orange County 17 area and they all couldn't figure it out exactly how 18 much they owe because it's a short time period that they 19 to have to sell hot food and cold food at the same time. 20 So, I think that might be a good 21 consideration. 22 MR. HORTON: Yeah. We also might want to put a 23 little more deliberative time into determining the 24 liability -- 25 MS. YEE: Yeah. 26 MR. HORTON: -- or the -- not necessarily the 27 liability, but the -- I can't recall -- but the 28 assessment, where we issue an assessment as a way of 6 1 trying to estimate what the liability is in order to 2 encourage them to bring in the books and records. 3 Oftentimes, that may be very challenging 4 because they are -- the clientele may not even be aware 5 of their liability as a retailer in the State of 6 California. 7 So, maybe some outreach to that business 8 community? 9 MS. YEE: Yeah, I -- 10 MR. HORTON: Member Yee. 11 MS. YEE: -- I think there were some specific 12 allegations relative to these two sub items. I just 13 wanted to be sure this was not anything that was 14 widespread in terms of the experience of these truck 15 owners. 16 But that -- that the issue of timely provision 17 of notice, I think, was one issue of how we -- how the 18 Board proceeded to compute their taxable sales and 19 really not giving them an opportunity to, you know, be 20 represented on the whole back and forth engagement -- 21 just created a little bit of concern to me. 22 I'm obviously sensitive because many of these 23 truck owners are owners for whom English is not their 24 primary language. 25 So, I think just -- if we can just get a little 26 bit more of a flavor of what the experience has been 27 with these catering trucks. I think this -- these two 28 were as a result of a SCOOP visit, I think. 7 1 MR. MC GUIRE: Okay. 2 MS. YEE: Yeah. 3 MR. HORTON: Okay. 4 MR. MC GUIRE: So, I will investigate the 5 situation and report back. 6 MR. HORTON: Thank you. 7 MS. YEE: Okay, thank you. 8 ---o0o--- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 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 JUNE 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 8 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: AUGUST 13, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 9