BOE's new look: the 411 on the state's new administrative tax entities.

• Author: Klasing, David W.
• Position: CATax

The California Board of Equalization was created to increase or decrease local tax assessments and is made up of representatives elected from the four congressional districts throughout the state.

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The organization has been plagued by controversy since the 1950s when a board member was the target of a grand jury indictment for conspiracy to solicit bribes in exchange for special treatment relating to alcohol licensing and taxation laws, which culminated in the Department of Finance Office of State Audits and Evaluations releasing a scathing report about the operation of the board.

Today, it seems the numerous calls for the BOE to be stripped of most of its duties have been answered.

On June 15, state legislators passed AB 102, the Taxpayer Transparency and Fairness Act (TTFA) of 2017. The TTFA splits the majority of the BOE's former duties between two newly created California tax entities.

As of July 1, the Department of Tax and Fee Administration (DTFA) is responsible for the administration of sales and use, business and excise taxes. Additionally, the DTFA will be responsible for the administration of particular state fees. The BOE still will be responsible for the administration (including the equalization and adjustment of property tax assessments, assessments of taxes on insurance providers and the administration of taxes on alcohol, to name a few). BOE employees who were responsible for the administration of sales and use, business and excise taxes were (or will be) transferred to the DTFA and continue in their roles.

Beginning Jan. 1, the BOE will no longer be responsible for maintaining a forum for tax disputes as the new Office of Tax Appeals (OTA) will hear appeals coming from the DTFA related to sales and use tax disputes, and FTB appeals relating to income tax disputes.

Critics of the BOE had long voiced concerns as to whether the board, the only elected tax commission in the United States, could serve as an impartial appellate body. The OTA's appellate panels will be made up of three administrative law judges that are appointed by the director of the OTA. Additionally, the OTA must adopt regulations that include restrictions similar to those targeting conflicts of interest among state politicians.

The delayed creation of the OTA is...