The Assembly Revenue and Taxation Committee approved legislation April 19 allowing the state to suspend the professional and occupational licenses over the non-payment of income taxes (AB 2038, Eng). The 6-3 vote was split down party lines, with Democrats in support.
Assemblyman Mike Eng said his bill, which now goes to the Assembly Appropriations Committee, will be amended to address concerns raised by the committee. Specifically, a sunset date will be added for the Franchise Tax Board's power to suspend licenses and the implementation date will be changed to avoid retroactivity and to address state agency concerns about how much time it will take to change their policies.
Mr. Eng said his bill is needed because $1.4 billion in state revenue is being lost because of delinquent payments from people who are "enriched" by having licenses to practice their professions in California. He said license revocation would affect only those people who have ignored notices about unpaid taxes and about the state's "very generous" installment payment options.
The bill was supported by Lenny Goldberg of the union-affiliated California Tax Reform Association and by a representative of the California Immigrant Policy Center.
A representative of the Landscape Contractors Association opposed the bill, saying it would set a bad precedent that might be followed by agencies that collect property taxes and other exactions.
Cal-Tax also opposes the bill, on the grounds that if the state takes away a person's ability to earn income, the person will be less able to raise money to pay the owed taxes.
In other committee action:
Committee Puts Brakes on Tax Increase on Valuable Vehicles. AB 1839 (Torrico), establishing a school safety program funded by a special car tax on vehicles with a market value of $50,000 or more, was held by the committee without a vote.
Panel Approves Burden-of-Proof Transfer. AB 2195 (Silva), transferring the burden of proof from the taxpayer to the Board of Equalization with respect to the imposition of fraud penalties and factual issues relevant to ascertaining tax liability, was approved unanimously and sent to the Assembly Appropriations Committee.
BOE Interest Abatement Measure Advances. AB 2375 (Knight), allowing the Board of Equalization to abate interest on a late payment of tax if the lateness is due to extraordinary circumstances and if it would be inequitable to compute interest in accordance with existing law, was approved unanimously and sent to the Assembly Appropriations Committee.
Expansion of Use Tax Registration Advances. AB 2676 (Ma), expanding the current business use tax registration and reporting program to certain businesses with less than $100,000 of gross receipts and making other changes, was approved on a 6-3 party-line vote and now goes to the Assembly Appropriations Committee.
Cal-TaxReports, April 26, 2010
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