The Senate voted 28-11 on August 30 to send SB 972 (Skinner), a CalTax-opposed bill requiring disclosure of confidential taxpayer information, to Governor Gavin Newsom despite concerns raised by the Franchise Tax Board that the bill could expose FTB members and staff to criminal liability.

The bill would require the FTB to breach a taxpayer’s confidentiality rights by producing annual reports on corporate taxpayers with gross receipts of $5 billion or more. The mandated reports would be shared with the Legislature’s two tax policy committees and would be available to the public, with information including the taxpayer’s name, tax liability, and the amount and types of tax credits claimed.

In its analysis of SB 972, the FTB warned lawmakers that the bill could expose the FTB’s three members (the director of the Department of Finance, the state controller, and the chair of the State Board of Equalization) and staff to prosecution, as it does not exempt them from Revenue and Taxation Code section 19542’s prohibition on publicly disclosing confidential taxpayer information.

“To ensure that the FTB or any member thereof is not found guilty of a misdemeanor for providing the specified information to the Committees, the bill should be amended by inserting on page 3, line 1, ‘Notwithstanding Section 19542’ after ‘(c),’” the FTB staff recommended. This language was never added to the bill.

CalTax and other opponents noted that lawmakers already have access to anonymized aggregate data from the FTB and do not need confidential taxpayer information to make policy decisions about tax incentives.

The bill is supported by the Service Employees International Union, California Tax Reform Association, American Civil Liberties Union, California Teachers Association, California Federation of Teachers, and several other public employee unions.