Misconception: remodeling? Expect a re-appraisal.

• Author: Williams, Len
• Position: CATax

There's a Common misconception that leaving one wall intact during a reconstruction will avoid having to have a re-appraisal done for property tax purposes.

Any major "new construction" will cause a reappraisal, at least to the extent of the "new construction."

What does "new construction" comprise? Some examples the California Board of Equalization Letter to the Assessors No. 79/204 gave include the conversion of a garage into a living area, the conversion of a portion of a warehouse to office space and the conversion of an existing room to a bathroom.

Note that none of the above examples refer to any walls interior or exterior.

In Case Anyone Missed It

Effective July 1. 2011. the combined statewide sales and use tax decreased from 8.25 percent to 7.25 percent, 'the temporary increase implemented in April 2009 expired June 30,2011.

Remember that district taxes still are applicable, so the tax rates in most areas of California will be greater than 7.25 percent. For a list of rates, visit www.boe.ca.gov/cgi-bin/rates.cgi.

Government Relations Doesn't Cost--It Pays

A recent example of this occurred during a bill proposal to ban contingency fees for anyone representing a taxpayer involving a matter with the California Revenue and Taxation Code. The analysis attributed to the legislative1 stall; as reported in the March 27, 2011, BNA Daily lax Report contained statements that were incorrect.

Fortunately; through the efforts of GalCPA's government relations stall and others in Sacramento, the bill was yanked and is presumed dead.

It was announced at the CalCPA OR Committee meeting in May that the FTB had been behind that legislation, figuring there'd be a whole lot fewer appeals from audit decisions if the taxpayers had to pay their representatives irrespective of any tax savings.

A similar, but more insidious move was quashed years ago during then-Gov Pete Wilson's term when legislation was introduced to allow anyone to audit financial statements not just CPAs. CalCPA's Sacramento staff sounded the alarm and enough CPAs responded to kill that bill.

Small Business Employer Advisory Committee

CalCPA member Jim Counts recently attended the May 10 SBEAC meeting Some highlights:

* Jennifer Stuhr is the new FTB Taxpayer Advocate.

* The EDD is subject to the governor's hiring freeze, although a potential employee may be paid from some source of funds other than the general fund or directly involved in revenue generation.

* Nearly 96 percent of...