(May 12, 2010) California Chamber of Commerce-supported legislation that would improve taxpayer fairness recently passed the Senate.
SB 1028 (Correa; D-Santa Ana) provides taxpayer fairness by allowing the Board of Equalization (BOE) to compute interest due on a monthly basis when equitable.
Under the legislation, the BOE is permitted to calculate late interest penalties at a daily rather than monthly rate when it deems that it is equitable to do so, based upon all the facts and circumstances.
Under current law, a taxpayer with a late payment is assessed a 10 percent penalty on top of a 7 percent interest penalty for the entire month in which the late payment occurred. As a result, a small business owner who is inadvertently 10 minutes late with an electronic payment can still get hammered with a full month’s interest penalty. In some cases, the interest penalty can exceed the amount of the payment.
SB 1028 is very narrow in scope. It is limited to taxpayers who have been relieved of all other penalties that applied to the late payment, essentially meaning the BOE found the taxpayer was innocent. SB 1028 takes California a step in the right direction by providing innocent taxpayers with limited equitable relief.
Key Vote
SB 1028 passed off the Senate Floor 30-0.
Ayes: Aanestad (R-Grass Valley), Alquist (D-Santa Clara), Ashburn (R-Bakersfield), R.Calderon (D-Montebello), Cedillo (D-Los Angeles), Cogdill (R-Modesto), Correa (D-Santa Ana), Cox (R-Fair Oaks), DeSaulnier (D-Concord), Ducheny (D-San Diego), Florez (D-Shafter), Hancock (D-Berkeley), Hollingsworth (R-Murrieta), Huff (R-Diamond Bar), Kehoe (D-San Diego), Leno (D-San Francisco), Lowenthal (D-Long Beach), Negrete McLeod (D-Chino), Padilla (D-Pacoima), Pavley (D-Agoura Hills), Price (D-Inglewood), Romero (D-East Los Angeles), Runner (R-Antelope Valley), Simitian (D-Palo Alto), Steinberg (D-Sacramento), Walters (R-Laguna Niguel), Wolk (D-Davis), Wright (D-Inglewood), Wyland (R-Carlsbad), Yee (D-San Francisco).
Absent, Abstaining, Not Voting: Corbett (D-San Leandro), Denham (R-Merced), Dutton (R-Rancho Cucamonga), Harman (R-Huntington Beach), Liu (La Canada Flintridge), Oropeza (D-Long Beach), Strickland (R-Thousand Oaks),Wiggins (D-Santa Rosa).
SB 1028 awaits action by the Assembly Desk.
Staff Contact: Kyla Christoffersen