2016 Sacramento Delegation
By Jenna Lewis1
The fourth annual Sacramento Delegation was held on Friday, February 4, 2016, at the State Capitol. A number of government practitioners were in attendance, including, Assembly Committee on Revenue and Taxation Chief Consultant, Oksana Jaffe; Senate Government and Finance Committee Staff Director, Colin Grinnell; Franchise Tax Board ("FTB") Chief Counsel, Jozel Brunett, and Board of Equalization ("BOE") Chief Counsel, Randy Ferris. The authors took turns presenting their proposals for the government attendees. The government attendees engaged in robust discussions with the authors on the viability of their proposals and provided valuable suggestions on how to achieve implementation. Participants enjoyed a reception at Greenberg Traurig, LLP following the event.
A brief summary of each proposal is provided below. The complete papers are available at: http://www.cabarsacramento.com/.
- ? Clean Break: Terminating Agency Relationship With Key Corporation
Mike Shaikh and Erin Mariano, both of Reed Smith LLP, suggested that new language be added to the Schedule R-7 and a new short form schedule to explicitly provide three options with respect to prior tax periods upon severance of a unitary relationship: (1) completely sever the key corporation relationship; (2) continue permitting the key corporation to act on behalf of the former group member, but provide the former group member notice of dealings with the FTB; or (3) continue the relationship as-is.
- ? Proposal to Amend Revenue and Taxation Code Section 19255 to Avoid Extension of the 20-Year Statute of Limitations by Unilateral Action of the California Franchise Tax Board
Andrew Allen of Morgan Lewis & Bockius LLP, proposed a statutory amendment to narrow the definition of "tax liability" for purposes of the statute of limitations on collections to include only the underlying tax and not additions to tax, such as interest, penalties or fees.
- ? Amendment of Revenue and Taxation Code to Clarify that Income Earned by a Reservation Indian is Exempt from Personal Income Tax if the Income is Earned from a Source Within Indian Country
Michelle LaPena of LaPena Law Corporation, proposed a statutory amendment to clarify the "McClanahan exception" from personal income tax for California tribal members who live and work in Indian Country without regard to the reservations on which the tribal members reside.
- ? Legislative Proposal for InfusingGuaranteed Fairness in Tax Administration By Allowing Partial Prepayment Judicial Review of FTB-Proposed Personal Income and Franchise Tax Deficiencies
Mark Bernsley of the Law Offices of Mark Bernsley, A Prof. Corp., proposed legislative changes that would allow partial or no prepayment access to judicial review for franchise and income tax deficiency determinations as an alternative to the pre-payment BOE appeals procedure.
- ? In Defense of Regulations: California, Market-Based Sourcing, and the Defense Industry
Shail Shah of Andersen Tax LLC, and Alexis Binazir of Hone Maxwell LLP, requested that the FTB provide guidance on how to reasonably approximate California receipts attributable to the service component of defense contracts with the United States government for purposes of the new market-based sourcing rules for sales of other than tangible personal property.
- ? Coordination of the BOE and FTB Voluntary Disclosure Programs and the Conflicting Registration Requirements of the Two Programs
Steven Walker of the Law Offices of Steven L. Walker, and Jonathan Amitrano of the Law Offices of A. Lavar Taylor, suggested that the FTB Voluntary Disclosure Program requirements be amended to allow taxpayers to apply to both the BOE and FTB Voluntary Disclosure Programs within 30 days of registering with the Secretary of State.
- ? A Proposal to Address the Improper and Unreasonable Fees Imposed by California Counties on Taxpayers When Exercising Their Rights to Appeal Assessed Property Taxes
Christina Harper of Morgan, Lewis & Bockius LLP, and Colin Fraser of Greenberg Traurig, LLP, urged the Legislature or the State Board of Equalization to address certain filing fees, hearing fees, and findings of fact fees imposed on California taxpayers to pursue their rights to appeal property tax assessments, and to establish uniform statutes and rules governing these fees.