(August 5, 2010) A California Chamber of Commerce-opposed “job killer” bill that would have created penalties with the potential to severely harm innocent taxpayers was pulled from committee by the author, and subsequently failed to meet the policy committee deadline in July.   

The bill, AB 2498 (Skinner; D-Berkeley), would have established a tax amnesty program related to “abusive tax avoidance transactions” along with severe penalties that could harm innocent taxpayers, as well as unfairly restrict the rights of attorneys and tax professionals to practice their professions.    

Amnesty Must Be Simple

The CalChamber does not condone, under any circumstances, the use of illegal tax avoidance transactions by taxpayers. The CalChamber strongly opposed AB 2498, however, because it did not focus on encouraging voluntary compliance according to clear guidelines. Instead, AB 2498 would have imposed a series of complex new definitions, standards and penalties that would have left taxpayers unaware of their responsibilities related to the amnesty program, created confusion that would ensnare unwitting, law-abiding taxpayers and exposed California employers to exorbitant and duplicative penalties.

At a time when California is desperately in need of jobs, this punitive approach would have strongly discouraged employers from relocating, remaining or expanding within the state, since an unwitting error could have been financially catastrophic under the terms of the bill.

Continued Action

While AB 2498 has been stopped, a tax amnesty program based on its approach will likely be included as part of the budget discussions. The CalChamber is working with a large coalition of employers and associations to ensure that such a proposal does not become part of the final budget solution.

Staff Contact: Mira Guertin