California State Board of Equalization explained

California State Board of Equalization
Type:Board
Seal:File:California State Board of Equalization seal.svg
Agency Type:Tax administration and fee collection
Jurisdiction:Government of California
Headquarters:Sacramento, California
Employees:400
Chief1 Name:Ted Gaines
Chief1 Position:First District
Chief2 Name:Sally Lieber
Chief2 Position:Second District
Chief3 Name:Tony Vazquez
Chief3 Position:Third District
Chief4 Name:Mike Schaefer
Chief4 Position:Fourth District
Chief5 Name:Malia Cohen
Chief5 Position:State Controller
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The California State Board of Equalization (BOE) is a public agency charged with tax administration and fee collection in the state of California in the United States. The authorities of the Board attempt to ensure that counties fairly assess property taxes, collect excises taxes on alcoholic beverages, administer the insurance tax program, and other tax collection related activities.[1]

The BOE is the only publicly elected tax commission in the United States.[2] It is made up of four directly elected members, each representing a district for four-year terms, along with the State Controller, who is elected on a statewide basis, serving as the fifth member. In June 2017, Governor Jerry Brown signed legislation stripping the Board of many of its powers, returning the agency to its original core responsibilities (originating in the State Constitution in 1879).

History

The State Board of Equalization was created in 1879 by the ratification of the second Constitution of California. Its original mandate was to ensure that property tax assessments were uniform and equal across all counties in the state.[1]

Prior to the creation of the state income tax, sales tax, and fuel taxes in the 1930s, California's state government was almost completely supported by property taxes, which were and still are assessed at the county level by elected tax assessors. Assessors were tempted to boost their popularity with county voters by undervaluing voters' property (and thereby lowering their taxes). This presented the risk of counties with honest assessors paying more than their fair share of the burden of operating the state government, so the Board of Equalization was created to equalize the burden.

The California Franchise Tax Board and the Employment Development Department are separately also responsible for collecting taxes. Some have criticized this as inefficient.[3] Efforts to reform the Board were made in the 1940s, 1950s, 1960s, 1990s, and 2000s.[4]

In 1994, Governor Pete Wilson vetoed a plan by the legislature to abolish the Franchise Tax Board and give its responsibilities to the Board of Equalization, explaining in his veto message that the state should have done the opposite. In 2004, Governor Arnold Schwarzenegger released a 2,500-page report seeking to merge the Board with other agencies and then promoted a bill by Assemblywoman Lois Wolk to do just that. The effort failed.[4] In 2008, the agency employed approximately 3,950 people throughout the state.[5]

By 2017, the Board had expanded to collecting $60 billion a year. It collected sales and use taxes, hazardous waste fees, jet fuel taxes, marijuana taxes, and over 30 additional taxes. That year, the Board had 4,700 employees and a $617 million annual budget. Board members are paid a $137,000 annual salary and are each allowed to hire a 12-member staff. Each year, the Board spends at least $3 million on education events where elected members appear before their constituents.[4]

In March 2017, an audit by the California Department of Finance revealed missing funds and signs of nepotism, leading to calls for the governor to put the Board under a public trustee.[6] [7] In June 2017, the California Department of Justice began a criminal investigation into the members of the Board.[8]

On June 27, 2017, Governor Jerry Brown signed into law legislation stripping the Board of many of its powers. The legislation created two new departments controlled by the governor responsible for the Board’s statutory duties, the California Department of Tax and Fee Administration and the California Office of Tax Appeals.[9]

The Board still has its constitutional powers to review property tax assessments and insurer tax assessments, and its role in the collection of alcohol excise and pipeline taxes.[10] It retained 400 employees, with the rest of its 4,800 workers being shifted to the new departments.[9]

Equalization districts

For the purposes of tax administration, the BOE divides the state into four Equalization districts, each with its own elected board member.[11] District boundaries are redrawn following the decennial census. The latest boundaries were drawn following the 2010 census and have been in effect since January 1, 2015.[12]

First district

The First Equalization District is made up of the following counties: Alpine, Amador, Butte, Calaveras, El Dorado, Fresno, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Stanislaus, Sutter, Tulare, Tuolumne and Yuba; a portion of Los Angeles County including the cities of Azusa, Bradbury, Claremont, Duarte, Irwindale, La Verne, Lancaster, Palmdale, Pomona, San Dimas, San Fernando and Santa Clarita; and most of San Bernardino County, the portion not included in the Third and Fourth districts. From 2003 until 2015 most of this area was the Second District.

Second district

The Second Equalization District is made up of the following counties: Alameda, Colusa, Contra Costa, Del Norte, Glenn, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Tehama, Trinity and Yolo. From 2003 until 2015 most of this area was the First District.

Third district

The Third Equalization District is made up of Ventura County; most of Los Angeles County, the portion not included in the First District; and the city of Chino Hills in San Bernardino County. From 2003 until 2015 most of this area was the Fourth District.

Fourth district

The Fourth Equalization District is made up of the following counties: Imperial, Orange, Riverside and San Diego; and a portion of San Bernardino County including the cities of Colton, Fontana, Grand Terrace, Highland, Loma Linda, Redlands, Rialto, San Bernardino, Twentynine Palms, Yucaipa and Yucca Valley. From 2003 until 2015 most of this area was the Third District.

Members of the Board of Equalization

List of members

Year1st District2nd District3rd District4th DistrictState Controller
(ex officio)
1879 rowspan=4James L. King rowspan=4Moses M. Drew rowspan=4Warren Dutton rowspan=4Tyler D. Heiskel rowspan=4Daniel M. Kenfield
1880
1881
1882
1883 rowspan=4Charles Gildea rowspan=16L. C. Morehouse rowspan=8C. E. Wilcoxon rowspan=4John Markley rowspan=8John P. Dunn
1884
1885
1886
1887 rowspan=4Gordon E. Sloss rowspan=4John T. Gaffey
1888
1889
1890
1891 rowspan=4J. S. Swan rowspan=16Richard H. Beamer rowspan=4James R. Hebbron rowspan=15Edward P. Colgan
1892
1893
1894
1895 rowspan=4A. Chesebrough rowspan=4George L. Arnold
1896
1897
1898
1899 rowspan=4J. G. Edwards rowspan=12Alexander Brown rowspan=4Thomas O. Toland
1900
1901
1902
1903 rowspan=4William H. Alford rowspan=4Frank Mattison
1904
1905
1906 rowspan=7A. B. Nye
1907 rowspan=4Joseph H. Scott rowspan=40Richard E. Collins rowspan=12Jeff McElvaine
1908
1909
1910
1911 rowspan=4Edward M. Rolkin rowspan=16John Mitchell
1912
1913 rowspan=8John S. Chambers
1914
1915 rowspan=12John C. Corbett
1916
1917
1918
1919 rowspan=4Phillip D. Wilson
1920
1921 rowspan=16Ray L. Riley
1922
1923 rowspan=12Harvey G. Cattell
1924
1925
1926
1927 rowspan=12John C. Corbett rowspan=16Fred E. Stewart
1928
1929
1930
1931
1932
1933
1934
1935 rowspan=4Orfa Jean Shontz
1936
1937 rowspan=9Harry B. Riley
1938
1939 rowspan=44George R. Reilly rowspan=16William G. Bonelli
1940
1941
1942
1943 rowspan=16James H. Quinn
1944
1945
1946 rowspan=7Thomas Kuchel
1947 rowspan=7Jerrold L. Seawell
1948
1949
1950
1951
1952
1953 rowspan=6Robert C. Kirkwood
1954 rowspan=17Paul R. Leake
1955 rowspan=4Robert E. McDavid
1956
1957
1958
1959 rowspan=17John W. Lynch rowspan=28Richard Nevins rowspan=8Alan Cranston
1960
1961
1962
1963
1964
1965
1966
1967 rowspan=8Houston I. Flournoy
1968
1969
1970
1971 rowspan=16William M. Bennett
1972
1973
1974
1975 rowspan=12Kenneth Cory
1976 rowspan=3Iris G. Sankey
1977
1978
1979 rowspan=8Ernest J. Dronenburg Jr.
1980
1981
1982
1983 rowspan=4Conway H. Collis
1984
1985
1986
1987 rowspan=8William M. Bennett rowspan=4Conway H. Collis rowspan=12Ernest J. Dronenburg, Jr. rowspan=4Paul B. Carpenter rowspan=8Gray Davis
1988
1989
1990
1991 rowspan=4Brad Sherman rowspan=4Matt Fong
1992
1993
1994
1995 rowspan=8Johan Klehs rowspan=8Dean Andal rowspan=2Brad Sherman rowspan=8Kathleen Connell
1996
1997 rowspan=10John Chiang
1998
1999 rowspan=8Claude Parrish
2000
2001
2002
2003 rowspan=2Carole Migden rowspan=7Bill Leonard rowspan=4Steve Westly
2004
2005 rowspan=10Betty Yee
2006
2007 rowspan=8Michelle Steel rowspan=3Judy Chu rowspan=8John Chiang
2008
2009
2010Barbara Alby / Sean WallentineSteve Shea / Jerome Horton
2011 rowspan=4George Runner rowspan=4Jerome Horton
2012
2013
2014
2015 rowspan=4George Runner rowspan=4Fiona Ma rowspan=4Jerome Horton rowspan=4Diane Harkey rowspan=8Betty Yee
2016
2017
2018
2019 rowspan=5Ted Gaines rowspan=4Malia Cohen rowspan=5Tony Vazquez rowspan=5Mike Schaefer
2020
2021
2022
2023 rowspan=1Sally Lieber rowspan=1Malia Cohen

Programs

After being reduced to its constitutional responsibilities in 2017, the Board retained almost none of its tax and fee responsibilities.[13] [14] [15] The only property taxes it actively administers in its entirety are state-assessed properties and the Private Railroad Car Tax; the Board acts only in an appellate role in collecting the Alcoholic Beverage Tax and Insurance Tax, reviewing appeals of denials of claims for refund.[16]

However, the Board does continue to appraise and audit public utilities, railroad companies and properties owned by counties outside of their own jurisdictions, known as 'state-assessed properties', and hear appeals from its own staff appraisals.

Tax administration programs

Regulatory programs

Appellate-only programs

Former responsibilities (as of 2008)

Sales and use tax programs

  • Sales and Use Tax
  • Bradley-Burns Uniform Local Sales and Use Tax
  • District Transactions (Sales) and Use Tax

Special tax and fee programs

  • Electronic Waste Recycling Fee
  • Environmental Fees
    • Hazardous Substances Tax
    • Marine Invasive Species Fee (formerly Ballast Water Management Fee)
    • Occupational Lead Poisoning Prevention Fee
  • Excise Taxes
    • Alcoholic Beverages Tax
    • Alternative Cigarette Tax Stamp Program (ACTS)
    • California Tire Fee
    • Cigarette and Tobacco Products Tax
    • Cigarette and Tobacco Products Licensing Program
    • Emergency Telephone Users Surcharge
    • Energy Resources Surcharge
    • Insurance Tax
    • Integrated Waste Management Fee
    • Natural Gas Surcharge
  • Fuel Taxes
    • Aircraft Jet Fuel Tax
    • Childhood Lead Poisoning Prevention Fee
    • Diesel Fuel Tax
    • International Fuel Tax Agreement (IFTA)
    • Interstate User Diesel Fuel Tax
    • Motor Vehicle Fuel Tax
    • Oil Spill Response, Prevention, and Administration Fees
    • Underground Storage Tank Maintenance Fee
    • Use Fuel Tax

Property Tax Programs

  • County-assessed droperties
  • Private Railroad Car Tax
  • State-assessed properties
  • Timber Yield Tax

Tax Appellate Programs

  • Bank and Corporation Tax Law
  • Personal Income Tax
  • Homeowner and Renter Property Tax Assistance Law
  • Publicly Owned Property Assessment Review Program
  • Taxpayers' Bill of Rights Law

See also

References

  1. State Board of Equalization, About BOE
  2. State Board of Equalization, Board Members
  3. http://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=1117&context=lawreview Daniel L. Simmons, California Tax Collection: Time for Reform
  4. News: Ashton. Adam. For 90 years, Californians have tried to kill this tax board. This is why they failed. 25 April 2017. The Sacramento Bee. 23 April 2017. en.
  5. State Board of Equalization, 2007-2008 Annual Report, Profile, "Governance" p. 3.
  6. News: Ashton. Adam. Audit: California tax collectors on 'parking lot duty' for promotional events as politicos push boundaries. 25 April 2017. The Sacramento Bee. 24 March 2017. en.
  7. News: Ashton. Adam. Here's the audit shaking up the Board of Equalization. 25 April 2017. The Sacramento Bee. 31 March 2017. en.
  8. News: Ashton. Adam. Criminal investigation targets California tax board leaders. 18 July 2017. The Sacramento Bee. 20 June 2017. en.
  9. News: McGreevy. Patrick. In massive shakeup, Gov. Jerry Brown breaks up California's scandal-plagued tax collection agency. 27 June 2017. Los Angeles Times. 18 July 2017.
  10. News: California – Bill shifts nearly all tax administration and appeal functions from the BOE to two new tax organizations. 18 July 2017. PricewaterhouseCoopers. June 2017.
  11. Web site: Maps: Final Draft Board of Equalization Districts | California Citizens Redistricting Commission . wedrawthelines.ca.gov . 17 January 2022 . https://web.archive.org/web/20110930033345/http://wedrawthelines.ca.gov/maps-final-draft-board-of-equalization-districts.html . 30 September 2011 . dead.
  12. Web site: BOE District Boundaries Effective January 5, 2015 - California State Board of Equalization. California State Board of. Equalization. www.boe.ca.gov.
  13. State Board of Equalization, 2007-2008 Annual Report, Profile, "Tax and Fee Programs, 2007-2008" pp. 2.
  14. Web site: Special Taxes. State Board of Equalization. May 21, 2006.
  15. Web site: December 2019. Summary of Constitutional and Statutory Authorities. live. California State Board of Equalization. https://web.archive.org/web/20060923090710/http://www.boe.ca.gov/pdf/pub72.pdf . 2006-09-23 .
  16. Web site: Fact Sheet. live. California Board of Equalization. https://web.archive.org/web/20190425135215/http://www.boe.ca.gov/pdf/pub1.pdf . 2019-04-25 .

External links