The 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 fell into four broad areas: sales and use taxes, property taxes, special taxes, and acting as an appellate body for franchise and income tax appeals (which are collected by the Franchise Tax Board). The BOE is the only publicly elected tax commission in the United States. In June 2017, Governor Jerry Brown signed legislation stripping the Board of most of its powers.
The board 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. The current board members are:
The terms of all five members, including the State Controller, began on January 5, 2015.
History
The State Board of Equalization was created in 1879 by 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.
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. Of course, 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. Efforts to reform the Board were made in the 1940s, 1950s, 1960s, 1990s, and 2000s. In 1990, voters elected Paul B. Carpenter onto the Board, two months after he had been convicted on federal corruption charges. He then spent seven years in prison.
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 Assemblywomen Lois Wolk to do just that. The effort failed. In 2008, the agency employed approximately 3,950 people throughout the state.
By 2017, the Board had expanded to collecting $60 billion a year. It collects sales and use taxes, hazardous waste fees, taxes on jet fuel, marijuana taxes, alongside over 30 additional taxes. That year, the Board had 4,700 employees and $617 million annual budget. Board members are paid a $137,000 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 member appear before their constituents. In 2016, it was revealed that Board Chairman Jerome Horton had spent $130,000 on designer office furniture, prompting criticism. Horton had been previously criticized over $731,835 in donations his wife's organizations had accepted from companies with matters before the Board.
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. In June 2017, the California Department of Justice began a criminal investigation into the members of the Board.
On June 27, 2017, Governor Jerry Brown signed into law legislation stripping the Board 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 Fee Administration and the California Office of Tax Appeals.
The Board still has its constitutional powers to review property tax assessments, insurer tax assessment, alcohol excise tax, and pipeline taxes. The Board will retain 400 employees, with the rest of its 4,800 workers being shifted to the new departments.
Equalization districts
For the purposes of tax administration, the BOE divides the state into four Equalization districts, each with its own elected board member. Following the 2011 redistricting, the new districts have been in effect since January 1, 2015.
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, Yuba, a portion of Los Angeles, and a portion of San Bernardino. Before 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 Clara, Santa Cruz, Solano, Sonoma, Tehama, Trinity, Yolo, and Santa Barbara. Before 2015, most of this area was the first district.
Third district
The third Equalization District is made up of Ventura County and a portion of Los Angeles County, including the cities of Agoura Hills, Alhambra, Arcadia, Artesia, Avalon, Baldwin Park, Bell, Bell Gardens, Bellflower, Beverly Hills, Burbank, Calabasas, Carson, Cerritos, City of Industry, Commerce, Compton, Covina, Cudahy, Culver City, Diamond Bar, Downey, El Monte, El Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens, Hawthorne, Hermosa Beach, Hidden Hills, Huntington Park, Inglewood, La Cañada Flintridge, La Habra Heights, La Mirada, La Puente, Lakewood, Lawndale, Lomita, Long Beach, Los Angeles, Lynwood, Malibu, Manhattan Beach, Maywood, Monrovia, Montebello, Monterey Park, Norwalk, Paramount, Pasadena, Pico Rivera, Redondo Beach, Rosemead, San Gabriel, San Marino, Santa Fe Springs, Santa Monica, Sierra Madre, Signal Hill, South El Monte, South Gate, South Pasadena, Temple City, Torrance, Vernon, Walnut, West Covina, West Hollywood, Westlake Village, and Whittier.
Fourth district
The fourth Equalization District is made up of the following counties: Imperial, Orange, Riverside, San Diego, a portion of Los Angeles, and a portion of San Bernardino.
Members of the Board of Equalization
Tax and fee programs
The State Board of Equalization administers the following tax and fee programs:
Sales and Use Tax Programs
For more information on sales and use taxes in California, see the "California" section of Sales taxes in the United States.
- 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 Properties Division
- Private Railroad Car Tax
- State-Assessed Property Program
- 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
- Districts in California
References
External links
- Board of Equalization