NR# 62-A
Date: December 22, 2000
Customer and Taxpayer Services Division
Andal Says Year 2000 was a Memorable Year for Tax Law
Changes
Dean Andal, Chairman, State Board of Equalization (BOE)
remarked today that a number of changes were made to tax laws
administered by the BOE during the 2000 legislative session.
Legislative changes take effect on January 1, 2001, unless
otherwise noted.
Highlights are as follows:
- Assembly Bill 511 (Chapter 107, Alquist) provides a 5
percent state General Fund sales and use tax exemption beginning
January 1, 2001, for purchases of tangible personal property,
as defined, by eligible entities, as determined by the California
Infrastructure and Economic Development Bank (CIEDB) board
within the Trade and Commerce Agency. An eligible entities
is one that complies with all of the following:
- The entity locates or expands a business in a California
county with an average annual unemployment rate 5 percentage
points or more above the statewide average, as specified.
- The entity makes a new investment of at least $150
million in the county and maintains that level of investment
for at least 24 months after the CIEDB board certifies
that the entity is eligible.
- The entity employs at least 175 new full-time employees
and at least 500 employees must be directly or indirectly
employed within the county for a period of 24 months
after the CIEDB board certifies that the entity is eligible.
- The exemption will expire on January 1, 2006.
- Assembly Bill 599 (Chapter 600, Lowenthal) allows entities
affiliated with a retailer to claim a bad debt deduction
on accounts found worthless that the retailer originally
reported as taxable sales on the retailer's sales and use
tax returns.
- Assembly Bill 2894 (Chapter 923, Committee on Revenue
and Taxation) allows a purchaser to issue an exemption certificate
to a fuel vendor for an amount equal to the sales or use
tax on the federal manufacturers' or importers' excise tax
imposed on his or her qualifying and nonqualifying fuel
purchases under specified circumstances; authorizes the
Board to prescribe a method to authenticate electronic returns
and applications filed with the Board; eliminates the requirement
that settlement disputes totaling less than $5,000 for Sales
and Use Tax administered by the Board be presented to the
Attorney General for review by delegating this authority
jointly to the Board's Executive Director and Chief Counsel;
and adds the requirement for persons whose estimated tax
liability averages $20,000 or more per month to submit payment
by electronic funds transfer (EFT) for certain Special Taxes
accounts.
- Assembly Bill 2898 (Chapter 1052, Committee on Revenue
and Taxation) authorizes the Board to grant equitable relief
for sales tax to innocent spouses, under procedures prescribed
by the Board, if the facts and circumstances warrant; provides
relief to a taxpayer whose employer withheld delinquent
taxes or fees from the taxpayer's pay, but failed to remit
amounts to the Board; provides relief of the late payment
penalty in cases where the taxpayer enters into and successfully
complies with an installment payment agreement; prohibits
the disclosure of confidential taxpayer information by tax
preparers; and extends the sunset date for the managed audit
program for two years.
- Senate Bill 876 (Chapter 838, Escutia) requires every
person who purchases a new tire from a retail seller of
new tires to pay a California tire fee of $1.00 per tire
until December 31, 2006, and $0.75 per tire after that date.
The definition of "new tire" is expanded to include a new
tire sold with a new or used motor vehicle, including the
spare.
- Senate Bill 1362 (Chapter 1085, Poochigian), with respect
to the disabled veterans' property tax exemption, increases
the current income threshold from either $24,000 or $34,000,
to $40,000.
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(See http://www.boe.ca.gov/legdiv/leg2000cont.htm
for more detailed information on all tax law changes
