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2013 MINUTES OF THE STATE BOARD OF EQUALIZATION 214

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2013 MINUTES OF THE STATE BOARD OF EQUALIZATION 214
214
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
The Board met at its offices at 450 N Street, Sacramento, at 10:32 a.m., with
Mr. Horton, Chairman, Ms. Steel, Vice Chairwoman, Ms. Yee and Mr. Runner present,
Ms. Mandel present on behalf of Mr. Chiang in accordance with Government Code section 7.9.
CHIEF COUNSEL MATTERS
OTHER CHIEF COUNSEL MATTERS
Report on Taxpayer Relief Following the California Supreme Court Decision in Elk
Hills Power, LLC v. State Board of Equalization
Richard Moon, Tax Counsel, Tax and Fee Programs Division, Legal Department,
reported methods certain state-assessed taxpayers may seek for relief for costs of emissions
reduction credits added to their replacement cost indicator of value (Exhibit 11.1).
Mr. Horton referred to the Legislative Committee, the matter of considering
potential legislation targeted to similarly situated taxpayers who did not file a petition.
Exhibits to these minutes are incorporated by reference.
Request for Board Direction on Publication of Legal Annotation 880.0155.005,
Low-Income Housing
Richard Moon, Tax Counsel, Tax and Fee Programs Division, Legal Department,
made introductory remarks regarding staff’s request for the Board’s direction on annotations
regarding payments (PILOT payments) made by low-income housing developers to local
governments for costs associated with the low-income housing property (Exhibit 11.2).
Speakers:
Marina Wiant, Policy Director, California Housing Consortium
Joel Rice, Attorney, California Council for Afford Housing
Dan Goodwin, Ventura County Assessor
James B. Rooney, Amador County Assessor, and
President, California Assessors’ Association
Mr. Horton read into the record a written public comment provided by Shamus
Roller, Executive Director, Housing California (Exhibit 11.3).
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board directed staff
to publish proposed Annotation 880.0155.005 and delete Annotation 880.0155 as recommended
by staff.
The Board recessed at 11:22 a.m. and reconvened at 11:42 a.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
215
Tuesday, November 19, 2013
CORPORATE FRANCHISE AND PERSONAL INCOME TAXES HEARINGS
Todd Bentley and Kate Bentley, 593582
2004, $132,041.00 Assessment
2005, $206,508.00 Assessment
For Appellants:
Todd Bentley, Taxpayer
Robert J. Chicoine, Attorney
For Franchise Tax Board:
Natasha Page, Tax Counsel
Fred Campbell-Craven, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether appellants have shown that respondent erroneously assessed additional
tax based on the sourcing to California of payments related to appellant-husband’s settlement of a
lawsuit with his employer.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board submitted the
appeal for decision.
The Board recessed at 12:23 p.m. and reconvened at 1:42 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
Applied Companies, 526527
1991, $15,744.05 Claim for Refund
1993, $39,555.12 Claim for Refund
For Appellant:
Betsy Klinger, Taxpayer
Lou Barnet, Representative
Marcus Frishman, Representative
Mike Dooley, Representative
For Franchise Tax Board:
Karen Smith, Tax Counsel
Eric Brown, Tax Counsel
Roman Johnston, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: Disqualifying
contributions to Mr. Horton and Ms. Yee were disclosed. Mr. Horton noted that his records
disclosed no contributions from this taxpayer, his agent or participants within the preceding 12
months. Ms. Yee returned a $6,800 contribution prior to this hearing and noted that her records
disclosed no other contributions from this taxpayer, his agent or participants within the preceding
12 months. No other disqualifying contributions were disclosed.
Issues:
Whether the FTB’s proposed assessments, which are based on federal
determinations and/or adjustments, are barred by the statute of limitations.
Whether appellant has substantiated its employee compensation deductions for
the tax years ending March 31, 1991, and March 31, 1993.
Appellant’s Exhibit:
Affidavit of Terry Milne, EA, and Presentation (Exhibit 11.4)
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board submitted the
appeal for decision.
216
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
SALES AND USE TAX APPEALS HEARING
Joginder Lal, 496075 (KH)
1-1-05 to 12-31-07, $36,584.67 Tax, $3,849.42 Negligence Penalty
For Petitioner:
George H. Fakhouri, Representative
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether additional adjustments are warranted to the unreported taxable sales.
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
PUBLIC HEARING
Proposed Adoption of Amendments to the Board of Equalization Rules for Tax
Appeals (RTA)
Bradley Heller, Tax Counsel, Tax and Fee Programs Division, Legal Department,
made introductory remarks regarding the adoption of proposed amendments to incorporate,
implement, and clarify Revenue and Taxation Code section 40, and address clean-up and
housekeeping issues (Exhibit 11.5).
Speakers were invited to address the Board, but there were none.
Action:
Upon motion of Ms. Steel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board adopted the
proposed amendments as recommended by staff.
LEGAL APPEALS MATTERS, CONSENT
The Board deferred consideration of the following matters: Frank Kenneth
Worth, 534789 (GH); Helen Laura Worth, 534792 (GH); SacCity Blue, Inc., 553411, 603490
(KH); and, S & C Motors, 468140 (BH).
With respect to the Legal Appeals Matters Consent Agenda, upon a single
motion of Ms. Yee, seconded by Ms. Steel and unanimously carried, Mr. Horton, Ms. Steel,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board made the following orders:
Abdelmajid M. Hamid, 463973, 463976 (STF)
1-1-05 to 3-24-08, $349,421.73 Tax, $87,355.45 Fraud Penalty, $87,356.00 Penalty for Failure to
Secure a License, $34,942.17 Failure-to-File Penalty, $34,942.17 Finality Penalty
2-1-04 to 8-31-04, $50,485.84 Tax, $12,621.46 Fraud Penalty, $12,621.50 Penalty for Failure to
Secure a License, $5,048.59 Failure-to-File Penalty, $00.00 Finality Penalty
Action:
Redetermine as recommended by the Appeals Division.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
217
Tuesday, November 19, 2013
Frank Kenneth Worth, 534789 (GH)
10-1-03 to 3-31-06, $15,464.58 Tax, $373.60 Late Payment Penalties, $1,274.80 Failure-to-File
Penalties, $1,274.80 Finality Penalties
Helen Laura Worth, 534792 (GH)
4-1-05 to 3-31-06, $15,464.58 Tax, $373.60 Late Payment Penalties, $1,274.80 Failure-to-File
Penalties, $1,274.80 Finality Penalties
Action:
The Board took no action.
Asish Singh, 490116 (JH)
7-1-05 to 9-30-08, $38,413.24 Tax, $4,186.79 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Mixserve, Inc., 491699, 597648 (AC)
10-1-05 to 9-6-08, $67,800.50 Tax, $6,865.38 Negligence Penalty, $40,000.00 Claim for Refund
Action:
Deny the claim for refund and redetermine as recommended by the Appeals
Division.
American Bio Medica Corporation, 470329, 470334 (OH)
10-1-99 to 9-30-07, $116,902.83 Tax, $00.00 Penalty, $55,389.24 Claim for Refund
Action:
Deny the claim for refund and redetermine as recommended by the Appeals
Division.
Cal-Door Enterprises of No. CA, 597964 (CH)
1-1-03 to 12-31-05, $63,616.17 Tax, $6,361.66 Negligence Penalty
Action:
No further adjustments in the administrative protest as recommended by the
Appeals Division.
SacCity Blue, Inc., 553411, 603490 (KH)
7-1-06 to 6-30-09, $00.00 Tax, $00.00 Penalties
7-1-06 to 12-31-09, $244,177.71 Claim for Refund
Action:
The Board took no action.
Nyoka Edy, 563276 (STF)
1-1-05 to 9-30-08, $6,055.00 Tax
Nyoka Edy, 563277 (STF)
1-1-05 to 9-30-08, $1,110.00 Tax
Action:
Grant the petition for rehearing as recommended by the Appeals Division.
S & C Motors, 468140 (BH)
7-1-01 to 12-31-02, $214,572.66
Action:
The Board took no action.
218
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS, CONSENT
The Board deferred consideration of the following matter: Diamond B Capital,
Inc. 623488.
With respect to the Corporate Franchise and Personal Income Tax Matters
Consent Agenda, upon a single motion of Ms. Steel, seconded by Ms. Yee and unanimously
carried, Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board made
the following orders:
Francisco Acosta, 612838
2004, $336.00 Claim for Refund
2005, $336.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Kristy Afraimi and David Afraimi, 607572
2004, $2,697.63 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Elizabeth Agan, 612482
2002, $898.00 Assessment
Action:
Sustain the action of the Franchise Tax Board as modified by its concessions.
Brad Beck and Glenda Beck, 574003
2007, $5,852.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Carl E. Berg and Mary Ann Berg, 400129
2000, $809,062.41 Assessment, $1,621,927.53 Claim for Refund, $913.13 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Binford Road, LLC, 592029
2002, $400.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Mordechai Dayan, 574437
2007, $411,400.00 Tax, $102,850.00 Late Filing Penalty
Action:
Sustain the action of the Franchise Tax Board as modified by its concessions.
Diamond B Capital, Inc. 623488
2010, $3,467.28 Claim for Refund
Action:
The Board took no action.
Aimee Marie Felker, 620573
2007, $771.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
219
Tuesday, November 19, 2013
Michael J. Gorun, 598170
2006, $1,360.70 Accuracy-Related Penalty
Action:
Modify the action of the Franchise Tax Board.
Goya Foods of California, Inc., 613801
2010, $2,373.47 Claim for Refund
Action:
Modify the action of the Franchise Tax Board.
Mauro Frank Gutierrez and Nohemi Gutierrez, 606491
2006, $1,813.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Gary Hansen, 598294
2007, $1,514.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Kimberly K. House, 625181
2010, $1,690.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Jo-Renee Hunter, 608111
2006, $228.34 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Audrey B. Jacobsen, 620571
2010, $712.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
James Lamb and Wendy Lamb, 614065
2010, $4,675.00 Claim for Refund
Action:
Modify the action of the Franchise Tax Board.
Christian J. Lane, 613265
2008, $2,352.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Richard A. Lopez, 575545, 592208
2006, $516.00 Claim for Refund
2010, $516.00 Claim for Refund
Action:
Modify the action of the Franchise Tax Board.
Patricia McGraw, 597959
2009, $666.25 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Candace Messer and Garth E. Messer, 605330
2008, $363.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
220
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
Luis A. Montes, 625006
2006, $1,453.75 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
P.L.P. Global, Inc., 614340
2010, $857.95 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Robert P. Riggs and Rita Young, 606389
2010, $1,616.64 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Chiquitha Marie Shaw, 607044
2005, $1,050.00 Claim for Refund
2006, $1,050.00 Claim for Refund
2007, $1,050.00 Claim for Refund
2008, $1,050.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Anthony A. Touchette, 574780
2005, $1,595.00 Assessment
Action:
Sustain the action of the Franchise Tax Board as modified by its concessions.
SALES AND USE TAX MATTERS, REDETERMINATIONS, RELIEF OF PENALTIES,
DENIALS OF CLAIMS FOR REFUND, AND, GRANT-ONE DAY INTEREST RELIEF,
CONSENT
With respect to the Sales and Use Tax Matters, Redeterminations, Relief of
Penalties, Denials of Claims for Refund, and, Grant-One Day Interest Relief, Consent Agenda,
upon a single motion of Mr. Runner, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Ms. Mandel not
participating in accordance with Government Code section 87105 in Cisco Technology, Inc.,
747305 (GH); the Board made the following orders:
Radioshack Corporation, 595706 (OH)
4-1-05 to 6-30-10, $260,040.46
Action:
Approve the redetermination as recommended by staff.
Scott Thomas Turner, 513953 (BH)
4-1-04 to 5-13-07, $189,384.43
Action:
Approve the redetermination as recommended by staff.
Superior Pool Products, LLC, 624596 (OH)
1-1-07 to 12-31-09, $779,505.30
Action:
Approve the redetermination as recommended by staff.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
221
Tuesday, November 19, 2013
Treasures, 551443 (FH)
4-1-06 to 3-31-09, $502,197.81
Action:
Approve the redetermination as recommended by staff.
SPX Corporation, 628371 (OH)
4-1-06 to 3-31-09, $10,588,262.36
Action:
Approve the redetermination as recommended by staff.
Cisco Technology, Inc., 747305 (GH)
1-1-13 to 3-31-13, $129,251.20
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 87105.
State of California-California Lottery, 601925 (KH)
1-1-08 to 6-30-12, $4,731,589.00
Action:
Approve the denial of claim for refund as recommended by staff.
Illumina, Inc., 743936 (FH)
1-1-13 to 3-31-13, $8,781.89
Action:
Approve the one day interest relief as recommended by staff.
SALES AND USE TAX MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
CONSENT
The Board deferred consideration of the following matter: R. R. C., 595740 (JH).
With respect to the Sales and Use Tax Matters, Credits, Cancellations and
Refunds, Consent Agenda, upon a single motion of Ms. Steel, seconded by Ms. Yee and
unanimously carried, Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes,
Ms. Mandel not participating in accordance with Government Code section 87105 in Check Point
Software Technologies, Inc., 722502 (BH); and, Taco Bell, 739819 (OH); the Board made the
following orders:
John Nick Petrillo, 747170 (AP)
10-1-08 to 12-31-09, $105,664.91
Action:
Approve the credit and cancellation as recommended by staff.
Bax Global, Inc., 729690 (OH)
10-1-08 to 6-30-11, $683,671.82
Action:
Approve the credit and cancellation as recommended by staff.
The Mobile Solution Corporation, 746347 (FH)
1-1-09 to 3-31-09, $170,599.92
Action:
Approve the credit and cancellation as recommended by staff.
The Mobile Solution Corporation, 746348 (FH)
4-1-09 to 5-31-09, $252,449.83
Action:
Approve the credit and cancellation as recommended by staff.
222
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
Ryjac Computer Solutions, Inc., 595904 (EA)
7-1-08 to 12-31-10, $1,008,762.35
Action:
Approve the credit and cancellation as recommended by staff.
Guaranty RV, Inc., 591926 (EH)
4-1-01 to 3-31-05, $302,560.35
Action:
Approve the refund as recommended by staff.
Nordstrom, Inc., 592159 (OH)
1-7-08 to 3-31-08, $267,308.93
Action:
Approve the refund as recommended by staff.
American Material Mgt. Allianc, Inc., 563037 (EH)
7-1-08 to 6-30-10, $214,052.88
Action:
Approve the refund as recommended by staff.
Idearc Media Corp., 738871 (OH)
4-1-09 to 6-30-12, $107,836.07
Action:
Approve the refund as recommended by staff.
Boston Scientific corporation, 614413 (OH)
4-1-07 to 12-31-11, $128,421.33
Action:
Approve the refund as recommended by staff.
Mercedes-Benz USA, LLC, 743140 (KH)
12-19-12 to 7-12-13, $285,634.00
Action:
Approve the refund as recommended by staff.
Check Point Software Technologies, Inc., 722502 (BH)
7-1-12 to 9-30-12, $273,916.49
Action:
Approve the refund as recommended by staff. Ms. Mandel not participating in
accordance with Government Code section 87105.
Taco Bell, 739819 (OH)
6-10-09 to 10-02-12, $347,929.75
Action:
Approve the refund as recommended by staff. Ms. Mandel not participating in
accordance with Government Code section 87105.
The Glynhard Corporation, 588915 (AS)
7-1-08 to 6-30-11, $237,761.26
Action:
Approve the refund as recommended by staff.
Nuvision Financial Federal Credit Union, 578456 (EA)
4-1-08 to 12-31-12, $773,573.80
Action:
Approve the refund as recommended by staff.
Infinera Corporation, 714058 (GH)
10-1-09 to 3-31-11, $313,510.18
Action:
Approve the refund as recommended by staff.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
223
Tuesday, November 19, 2013
American Seating Company, 623753 (OH)
1-1-12 to 6-30-12, $132,667.95
Action:
Approve the refund as recommended by staff.
R. R. C., 595740 (JH)
10-1-08 to 9-30-11, $134,439.57
Action:
The Board took no action.
Enphase Energy, Inc., 703804 (JH)
1-1-12 to 3-31-12, $39,182.05
Action:
Approve the refund as recommended by staff.
Seamicro, Inc., 729693 (GH)
10-1-09 to 12-31-12, $106,600.72
Action:
Approve the refund as recommended by staff.
SPECIAL TAXES MATTERS, DENIAL OF CLAIM FOR REFUND, CONSENT
With respect to the Special Taxes Matters, Denial of Claim for Refund, Consent
Agenda, upon motion of Mr. Runner, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating, the
Board made the following order:
US Telecom, Inc., 304389, 548379 (STF)
8-1-00 to 8-31-04, $623,457.64
Action:
Approve the denial of claim for refund as recommended by staff. Ms. Mandel not
participating.
SPECIAL TAXES MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
CONSENT
With respect to the Special Taxes Matters, Credits, Cancellations and Refunds,
Consent Agenda, upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board made the following order:
The Wine Group, LLC, 741827 (STF)
6-1-13 to 6-30-13, $144,383.40
Action:
Approve the refund as recommended by staff. Ms. Mandel not participating in
accordance with Government Code section 7.9.
PROPERTY TAXES MATTERS, CONSENT
With respect to the Property Taxes Matters, Consent Agenda, upon a single
motion of Mr. Runner, seconded by Ms. Yee and unanimously carried, Mr. Horton, Ms. Steel,
Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in accordance with
Government Code section 7.9, the Board made the following orders:
224
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
Petitions for Reassessment of Unitary Value
Golden State Water Company (101), 742934
2013, $611,100,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $608,900,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Pacific Bell Telephone Company (279), 742888
2013, $6,882,100,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $6,520,100,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Central California Traction Co. (818), 742893
2013, $7,820,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $7,680,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Dynegy Moss Landing, LLC (1103), 743422
2013, $491,400,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $480,000,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Cabrillo Power I, LLC (1106), 743435
2013, $116,800,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $116,700,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
GenOn Delta, LLC (1109), 743437
2013, $87,700,000.00 Unitary Value
Action:
Deny the petition for reassessment of 2013 unitary value as recommended by
staff. Ms. Mandel not participating in accordance with Government Code section 7.9.
Reliant Energy Ormond Beach, LLC (1115), 743431
2013, $112,900,000.00 Unitary Value
Action:
Deny the petition for reassessment of 2013 unitary value as recommended by
staff. Ms. Mandel not participating in accordance with Government Code section 7.9.
High Desert Power Trust 2000-A, LLC (1127), 742933
2013, $231,100,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $222,400,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Delta Energy Center, LLC (1128), 742894
2013, $326,900,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $316,300,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
225
Tuesday, November 19, 2013
Pastoria Energy Facility, LLC (1131), 742895
2013, $363,600,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $352,800,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Calpine Construction Finance Co., LP (1132), 742897
2013, $141,700,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $137,800,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Metcalf Energy Center, LLC (1133), 742898
2013, $239,000,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $231,700,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Otay Mesa Generating Company, LLC (1134), 742899
2013, $345,600,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $329,000,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Sunrise Power Company, LLC (1137), 742939
2013, $184,200,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $177,900,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Russell City Energy Company, LLC (1151), 742932
2013, $668,100,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $497,900,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
GenOn Marsh Landing, LLC (1157), 743433
2013, $544,800,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $542,600,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
El Segundo Energy Center, LLC (1158), 743429
2013, $216,100.000.00 Unitary Value
Action:
Deny the petition for reassessment of 2013 unitary value as recommended by
staff. Ms. Mandel not participating in accordance with Government Code section 7.9.
CPV Sentinel, LLC (1160), 743419
2013, $682,500,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $649,400,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
226
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
Cricket Communications, Inc. (2762), 745875
2013, $86,400,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $73,600,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Zayo Group, LLC (7778), 742938
2013, $49,200,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $37,200,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Americom Government Services, Inc. (7912), 742833
2013, $570,000.00 Unitary Value
Action:
Reduce the 2013 unitary value to $264,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Petition for Penalty Abatement on Unitary Value
Calaveras Telephone Company (210), 742794
2013, $13,970,000.00 Penalty
Action:
Approve the penalty abatement on 2013 unitary value as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Petition for Penalty Abatement on Unitary Escape Assessment
MetroPCS Communications, Inc. (2733), 747165
2013, $322,725,000.00 Penalty
Action:
Approve the penalty abatement on 2013 unitary escape assessment as
recommended by staff. Ms. Mandel not participating in accordance with Government Code
section 7.9.
LEGAL APPEALS PROPERTY TAXES MATTERS, CONSENT
The Board deferred consideration of the following matter: Global Tel*Link
Corporation (7988), 747162.
With respect to the Legal Appeals Property Taxes Matters, Consent Agenda,
upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried, Mr. Horton,
Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in accordance with
Government Code section 7.9, the Board made the following order:
Petition for Penalty Abatement on Escape Assessment
Global Tel*Link Corporation (7988), 747162
2009-2012, $580,000.00 Value, $58,000.00 Penalty, $130,200.00 Interest
Action:
The Board took no action.
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Tuesday, November 19, 2013
Penalty Abatement on Unitary Escape Assessment
NTCH-CA, Inc. (2764), 522064
2007-2008, $574,014.00 Value, $57,400.00 Penalty, $111,622.00 In-Lieu Interest
Action:
Grant the petition for reassessment in part and reduce the total 2007 and 2008
Board-adopted values of $743,036.00 to $685,636.00 as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
LEGAL APPEALS MATTERS, ADJUDICATORY
Safwat Tawadros Salib and Wafaa Salib, 534396 (EH)
1-1-06 to 3-31-09, $00.00 Tax, $00.00 Penalty
Considered by the Board: Hearing Notice Sent – Hearing Request Withdrawn
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Sonja M. Craighton, 558975 (KH)
10-1-07 to 6-30-10, $46,355.03 Tax, $4,635.53 Negligence Penalty
Considered by the Board: January 15, 2013
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division. The Board directed staff
to inform the taxpayer of the Offer in Compromise program.
East Coast Foods, Inc., 444779 (AS)
7-1-01 to 6-30-05, $1,349,989.74 Tax, $134,999.02 Negligence Penalty, $46,060.60 AmnestyDouble Negligence Penalty, $52,564.30 Amnesty Interest Penalty
Considered by the Board: Summary Decision (Rev. & Tax. Code, § 40)
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
The Board deferred the matter to the following day to consider a revision.
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS,
ADJUDICATORY
Richard A. Hall, 533898
Action:
(Motion expunged.)
Myles D. Hubers and Michelle Hubers, 534595
Action:
(Motion expunged.)
With respect to the Corporate Franchise and Personal Income Tax Matters
Adjudicatory Agenda, upon a single motion of Ms. Yee, seconded by Ms. Steel and unanimously
carried, Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board
ordered that its previous motion be expunged.
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Tuesday, November 19, 2013
Richard A. Hall, 533898
2003, $157,185.00 Assessment
Considered by the Board: February 27, 2013
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Ms. Yee moved to adopt a decision denying the petition for rehearing. The
motion was seconded by Ms. Mandel. Ms. Steel made a substitute motion to grant the petition for
rehearing. The substitute motion failed for lack of a second.
Upon a new substitute motion of Mr. Runner, seconded by Ms. Steel and duly
carried, Ms. Steel, Mr. Runner and Ms. Mandel voting yes, Mr. Horton and Ms. Yee voting no,
the Board granted the petition for rehearing.
Myles D. Hubers and Michelle Hubers, 534595
2001, $192,637.00 Assessment, $77,055.00 Noneconomic Substance Transaction (NEST)
Penalty, $76,311.32 Interest-Based Penalty
2002, $208,177.00 Assessment, $83,271.00 NEST Penalty, $64,973.64 Interest-Based Penalty
2003, $298,861.00 Assessment, $119,544.00 NEST Penalty, $73,341.00 Interest-Based Penalty
Considered by the Board: Summary Decision (Rev. & Tax. Code, § 40)
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board adopted the
written summary decision as presented by staff.
SALES AND USE TAX MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
ADJUDICATORY
Pacmac, Inc., 699402 (OH)
10-1-97 to 9-30-05, $971,535.40
Considered by the Board: Presented for Separate Discussion
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Steel, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board approved the
refund as recommended by staff.
TAX PROGRAM NONAPPEARANCE MATTERS NOT SUBJECT TO CONTRIBUTION
DISCLOSURE STATUTE
PROPERTY TAX MATTERS
Audits
Crimson California Pipeline, LP (490)
2010-2012, $2,100,000.00 Escaped Assessment, $130,000.00 Penalties, $321,000.00 In-lieu
Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the audit adjustments as
recommended by staff.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
229
Tuesday, November 19, 2013
Smart City Networks, LP (2099)
2009-2012, $5,841,000.00 Escaped Assessment, $584,100.00 Penalties, $1,513,980.00 In-lieu
Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Yee and Mr. Runner voting yes, Ms. Steel not participating in accordance with
Government Code section 87105, Ms. Mandel not participating in accordance with Government
Code section 7.9, the Board adopted the audit adjustments as recommended by staff.
McLeodUSA Telecommunications Services, Inc. (7914)
2009-2011, $751,000.00 Escaped Assessment, $75,100.00 Penalties, $251,070.00 In-lieu Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the audit adjustments as
recommended by staff.
Limited Scope Audits (ERC)
San Diego Gas and Electric Company (141)
2009-2012, $43,900,000.00 Excessive Assessment, $12,795,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Southern California Edison Company (148)
2011-2012, $19,500,000.00 Excessive Assessment, $3,843,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Dynegy Moss Landing, LLC (1103)
2009-2012, $22,800,000.00 Excessive Assessment, $6,093,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Dynegy Morro Bay, LLC (1104)
2009, $200,000.00 Excessive Assessment, $84,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
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Tuesday, November 19, 2013
La Paloma Generating Company, LLC (1112)
2009, $10,700,000.00 Excessive Assessment, $4,494,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
GenOn Energy West, LP – Coolwater (1113)
2009, $100,000.00 Excessive Assessment, $42,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
GenOn Energy West, LP – Mandalay (1114)
2009, $100,000.00 Excessive Assessment, $42,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
GenOn Energy West, LP – Ormond Beach (1115)
2009, $300,000.00 Excessive Assessment, $126,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
GenOn Energy West, LP – Etiwanda (1116)
2009, $100,000.00 Excessive Assessment, $42,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Mountainview Power Company, LLC (1119)
2009, $12,200,000.00 Excessive Assessment, $5,124,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
231
Tuesday, November 19, 2013
Elk Hills Power, LLC (1126)
2009-2010, $13,500,000.00 Excessive Assessment, $5,004,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Yee and Mr. Runner voting yes, Ms. Steel not participating in accordance with
Government Code section 87105, Ms. Mandel not participating in accordance with Government
Code section 7.9, the Board adopted the limited scope audit adjustments as recommended by
staff.
High Desert Power Trust 2000-A (1127)
2009-2012, $17,600,000.00 Excessive Assessment, $4,854,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Delta Energy Center, LLC (1128)
2009-2012, $28,400,000.00 Excessive Assessment, $8,013,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Pastoria Energy Facility, LLC (1131)
2009-2012, $30,800,000.00 Excessive Assessment, $8,823,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Calpine Construction Finance Company, LP (1132)
2009-2012, $14,400,000.00 Excessive Assessment, $4,230,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Metcalf Energy Center, LLC (1133)
2009-2012, $20,700,000.00 Excessive Assessment, $5,931,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
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2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
Otay Mesa Generating Company, LLC (1134)
2010-2012, $34,200,000.00 Excessive Assessment, $8,046,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Sunrise Power Company, LLC (1137)
2009, $9,100,000.00 Excessive Assessment, $1,365,000.00 Assessment in lieu of Interest
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the limited scope audit
adjustments as recommended by staff.
Unitary Land Escaped Assessments
Cellco Partnership (2559)
2011-2012, $236,585.00 Full Value
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the unitary land escaped
assessment as recommended by staff.
Sprint Telephony PCS, LP (2720)
2010-2013, $4,136,686.00 Full Value
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the unitary land and
improvements escaped assessment, plus applicable penalty and interest, as recommended by staff.
MetroPCS Communications (2733)
2012, $532,616.00 Full Value
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the unitary land escaped
assessment, plus applicable penalty and interest, as recommended by staff.
Cricket Communications, Inc. (2762)
2012, $228,767.00 Full Value
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the unitary land escaped
assessment as recommended by staff.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
233
Tuesday, November 19, 2013
Allocation Adjustments
AT&T Mobility, LLC (2606)
2010, Alameda County ($202,482.00)
2010, San Francisco County $202,482.00
2011, Alameda County ($202,482.00)
2011, San Francisco County $202,482.00
2012, Alameda County ($202,482.00)
2012, San Francisco County $202,482.00
MetroPCS Communications (2733)
2010, San Francisco County ($211,610.00)
2010, San Mateo County $211,610.00
2011, San Francisco County ($211,610.00)
2011, San Mateo County $211,610.00
2012, San Francisco County ($211,610.00)
2012, San Mateo County $211,610.00
T-Mobile West Corporation (2748)
2010, San Francisco County ($132,582.00)
2010, Contra Costa County $132,582.00
2011, San Francisco County ($132,582.00)
2011, Contra Costa County $132,582.00
2012, San Francisco County ($211,610.00)
2012, Contra Costa County $132,582.00
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board adopted the allocation adjustments as
recommended by staff.
Assessment Cancellations of Emission Reduction Credits
Pacific Gas and Electric Company (135)
2013, $11,000,000.00
AES Alamitos, LLC (1100)
2013, $200,000.00
AES Redondo Beach, LLC (1101)
2013, $100,000.00
AES Huntington Beach, LLC (1102)
2013, $100,000.00
Dynegy Morro Bay, LLC (1104)
2013, $100,000.00
Dynegy Oakland, LLC (1105)
2013, $10,000.00
EI Segundo Power (1110)
2013, $100,000.00
La Paloma Generating Company (1112)
2013, $12,600,000.00
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2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
Assessment Cancellations of Emission Reduction Credits (Continued)
GenOn Energy West, LP - (RR) Energy Mandalay, Inc. (1114)
2013, $100,000.00
GenOn Energy West, LP - RRI Energy Etiwanda, Inc. (1116)
2013, $100,000.00
GWF Energy, LLC - Hanford (1122)
2013, $200,000.00
GWF Energy, LLC - Henrietta (1123)
2013, $200,000.00
GWF Energy, LLC - Tracy (1124)
2013, $13,300,000.00
Elk Hills Power, LLC (1126)
2013, $8,600,000.00
Gilroy Energy Center, LLC (1129)
2013, $300,000.00
Blythe Energy, LLC (1136)
2013, $5,300,000.00
Indigo Generation, LLC (1141)
2013, $300,000.00
Larkspur Energy, LLC (1142)
2013, $200,000.00
Harbor Cogeneration Company, LLC (1145)
2013, $100,000.00
Inland Empire Energy Center, LLC (1148)
2013, $18,100,000.00
Panoche Energy Center, LLC (1152)
2013, $2,000,000.00
Starwood Power-Midway, LLC (1153)
2013, $500,000.00
Bicent (California) Malburg, LLC (1154)
2013, $3,800,000.00
Orange Grove Energy, LP (1155)
2013, $400,000.00
Mariposa Energy, LLC (1159)
2013, $1,900,000.00
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, Ms. Steel not participating in accordance with
Government Code section 87105 in Elk Hills Power, LLC (1126); the Board adopted the
assessment cancellation of the portion of the assessment attributable to the inclusion of the
replacement cost of emission reduction credits as recommended by staff.
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235
Tuesday, November 19, 2013
Board Roll Changes
2010, 2011, 2012 and 2013 State-Assessed Property Rolls
Action:
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in
accordance with Government Code section 7.9, the Board approved corrections to the 2010,
2011, 2012 and 2013 Board Rolls of State-Assessed Property as recommended by staff
(Exhibit 11.6).
OFFER-IN-COMPROMISE RECOMMENDATIONS
Action:
Upon motion of Ms. Steel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board approved the
Offer in Compromise Recommendations of Israel Diaz Guevara; and, Tamara Ann O’Dea; as
recommended by staff.
ANNOUNCEMENT OF CLOSED SESSION
The Board recessed at 3:38 p.m. and reconvened immediately in closed session
with Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
CLOSED SESSION
The Board met to discuss settlements (Rev. & Tax. Code §§ 6901, 7093.5,
30459.1 and 50156.11) and personnel matters (Gov. Code § 11126(a)).
The Board recessed at 4:09 p.m. and reconvened immediately in open session
with Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
On behalf of the Board, Mr. Horton acknowledged the tragic Typhoon Haiyan in
the Philippines and expressed compassion and support to BOE employees, as well as friends and
relatives of those in the affected area.
FINAL ACTION ON CORPORATE FRANCHISE AND PERSONAL INCOME TAXES
HEARING HELD NOVEMBER 19, 2013
Todd Bentley and Kate Bentley, 593582
Final Action: Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Ms. Steel and Mr. Runner voting no, the Board sustained
the action of the Franchise Tax Board.
Applied Companies, 526527
Final Action: Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board sustained the
action of the Franchise Tax Board.
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2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, November 19, 2013
FINAL ACTION ON SALES AND USE TAX APPEALS HEARINGS HELD
NOVEMBER 19, 2013
SMF Energy Corporation, 556419, 557544 (OH)
4-1-05 to 3-31-08, $375,809.47 Tax
12-15-06 to 10-31-10, $618,483.00 Claim for Refund
For Petitioner/Claimant:
Waived Appearance
For Sales and Use Tax Department:
Andrew Kwee, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether a portion of the selling price charged for fuel represents a fee charged
by petitioner for nontaxable services.
Action:
Upon motion of Ms. Mandel, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division and that the matter not be
held in abeyance pending the adoption of a summary decision for publication.
Joginder Lal, 496075 (KH)
Final Action: Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered the
amount allowed for pilferage be adjusted to 2 percent, and that the petition otherwise be
redetermined as recommended by the Appeals Division.
The Board recessed at 4:13 p.m.
The foregoing minutes are adopted by the Board on March 25, 2014.
Note: The following matters were removed from the calendar prior to the meeting: Gregory Scott
Smith, 532481 (GH); Amy Elaine Smith, 532485 (GH); Mordehay Rabinowiz, 489446 (AC);
Richard M. Kerbel, 560503; and, Barry L. Weiss and Dorraine Gilbert Weiss, 605043.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
237
Wednesday, November 20, 2013
The Board met at its offices at 450 N Street, Sacramento, at 9:35 a.m., with
Ms. Steel, Vice Chairwoman, and Ms. Yee present, Ms. Mandel present on behalf of Mr. Chiang
in accordance with Government Code section 7.9.
The Board recessed at 9:36 a.m. and reconvened at 10:04 a.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
SPECIAL PRESENTATION
BOE Headquarters Building
Liz Houser, Deputy Director, Administration Department, introduced James
Derby, Assistant Deputy Director, Real Estate Division, Department of General Services, who
provided an update on the Headquarters Facilities. The update included a general update on
BOE’s Headquarters’ consolidation and the status of the Lease Request for Information (RFI)
seeking options to address this facility need (Exhibit 11.7).
Speakers:
Roger Dickinson, California State Assembly Member, 7th District
Ashley Martinez, Legislative Advocate, SEIU
Brenda Fleming, Chief Information Officer, Technology Services Department,
BOE
George Alvarado, Manager, Local Area Network Administration and PC Support
Unit, Technology Services Department, BOE
Rob Hunga, Manager, Network Support Section, Technology Services
Department, BOE
Aaron Airozo, Manager, Server Application Support Unit, Technology Services
Department, BOE
Dennis Baylis, Business Taxes Specialist, Compliance & Technology
Section/ACMS Team, Sales & Use Tax Department, BOE
Linda Budge, Mayor, City of Rancho Cordova
Tabitha Hamilton, Digital Composition Specialist, Board Proceedings Division,
BOE, representing SEIU Local 1000 District 14 Printing Trades
Exhibits to these minutes are incorporated by reference.
SALES AND USE TAX APPEALS HEARINGS
Tri Minh Phan, 539025 (KH)
4-1-07 to 12-31-09, $10,024.65 Tax, $1,002.49 Negligence Penalty
For Petitioner:
Tri Minh Phan, Taxpayer
For Sales and Use Tax Department:
Marc Alviso, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the amount of unreported taxable sales.
Whether petitioner was negligent.
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2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 20, 2013
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Mark J. Weidhaas and Richard A. Weiner, 577043 (UT)
9-10-10, $33,250.00 Tax
For Petitioners:
Joe Micallef, Jr., Representative
Joe Micallef, Sr., Representative
For Sales and Use Tax Department:
Monica Silva, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether petitioner’s purchase and use of an aircraft is subject to use tax.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Katherine E. Lett, 576171, 654996 (CH)
7-1-07 to 9-30-10, $72,823.42 Tax, $7,397.25 Negligence Penalty, $7,397.25 Finality Penalty,
For Petitioner:
Katherine E. Lett, Taxpayer
For Sales and Use Tax Department:
Marc Alviso, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the amount of unreported taxable sales.
Whether any adjustments are warranted to the amount of unreported taxable
cigarette rebates.
Whether taxpayer was negligent.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
ADMINISTRATIVE SESSION
ADMINISTRATIVE MATTERS, CONSENT
The Board deferred consideration of the following matters: Effects of Proposition
10 on Cigarette and Tobacco Products Consumption; Proposed Revisions to Compliance Policy
and Procedures Manual Chapter 7, Collections; and, Proposed Revision to Audit Manual,
Chapter 4, General Audit Procedures.
With respect to the Administrative Matters, Consent Agenda, upon a single
motion of Ms. Yee, seconded by Mr. Runner and unanimously carried, Mr. Horton, Ms. Steel,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board made the following orders:
Action:
Adopt the following resolutions, extending its sincere and grateful appreciation
to the retirees for their dedicated service to the State Board of Equalization and to the State of
California, their congratulations on each retiree's well-earned retirement, and best wishes to them
and their families for continued success, happiness and good health in the years to come
(Exhibit 11.8).
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
239
Wednesday, November 20, 2013
Michael Barcena, Chief Information Security Officer, Information Security
Office, Administration Department, Headquarters
Irving James Buford III, Assistant Information Systems Analyst, Technology
Services Department, Headquarters
Margie F. Dean, Business Taxes Specialist I, Sales and Use Tax Department,
Out-of-State Chicago Office
Louie E. Feletto, Chief, Special Taxes Audit and Carrier Division, Property and
Special Taxes Department, Headquarters
Lynn M. Garcia, Business Taxes Specialist I, Program Policy and Administration
Branch, Property and Special Taxes Department, Headquarters
Theresa E. Hannan, Senior Investigator, Investigations and Special Operations
Division, Legal Department
Jesus (Jesse) Macias, Supervising Tax Auditor II, West Covina Office
Action:
Adopt the 2014 Timberland Production Zone Values as recommended by staff
(Exhibit 11.9).
Action:
Approve Assessors' Handbook Section 581, Equipment and Fixtures Index,
Percent Good and Valuation Factors, as recommended by staff (Exhibit 11.10).
Action:
Approve proposed addition to Compliance Policy and Procedures Manual
Chapter 10, Statewide Compliance and Outreach Program, as recommended by staff
(Exhibit 11.11).
ADOPTION OF BOARD COMMITTEE REPORT AND APPROVAL OF COMMITTEE ACTIONS
Business Taxes Committee
Action:
The Board deferred the matter to later in the day.
OTHER ADMINISTRATIVE MATTERS
Executive Director’s Report
Eric Steen, CROS Project Director, provided a report regarding the progress on
the CROS project to replace BOE’s two current tax legacy technology systems.
Randy Ferris, Chief Counsel, provided an update on the rate-setting delegation to
the Executive Director to address concerns raised regarding the delegation of certain nondiscretionary administrative rate-setting adjustments (Exhibit 11.12).
Sales and Use Tax Deputy Director’s Report
Jeff McGuire, Deputy Director, Sales and Use Tax Department, provided an
update on the statewide expansion of the no cash policy parameters (Exhibit 11.13).
240
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 20, 2013
Property and Special Taxes Deputy Director’s Report
David Gau, Deputy Director, Property and Special Taxes Department, provided
an update regarding the Fire Prevention Fee Program.
LEGAL APPEALS MATTER, ADJUDICATORY
East Coast Foods, Inc., 444779 (AS) (Continued)
7-1-01 to 6-30-05, $1,349,989.74 Tax, $134,999.02 Negligence Penalty, $46,060.60 AmnestyDouble Negligence Penalty, $52,564.30 Amnesty Interest Penalty
Considered by the Board: Summary Decision (Rev. & Tax. Code, § 40)
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board adopted the
revised written summary decision as presented by staff.
FINAL ACTION ON SALES AND USE TAX APPEALS HEARINGS HELD
NOVEMBER 20, 2013
Tri Minh Phan, 539025 (KH)
Final Action: Upon motion of Ms. Steel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the negligence penalty be removed and that the petition otherwise be redetermined as
recommended by the Appeals Division. The Board directed staff to inform the taxpayer of the
Offer in Compromise program.
Mark J. Weidhaas and Richard A. Weiner, 577043 (UT)
Final Action: Ms. Yee moved that the petition be redetermined as recommended by staff. The
motion was seconded by Mr. Horton. Ms. Yee withdrew her motion.
Upon motion of Ms. Mandel, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision, granting the petitioner 30 days to file supporting
documents, the Department 30 days to respond, and the Appeals Division 30 days thereafter to
review the parties’ submissions and provide its recommendation to the Board.
Katherine E. Lett, 576171, 654996 (CH)
Final Action: Upon motion of Ms. Steel, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the negligence and finality penalties be removed and that the petition otherwise be redetermined
as recommended by the Appeals Division. The Board directed staff to inform the taxpayer of the
Offer in Compromise program.
2013 MINUTES OF THE STATE BOARD OF EQUALIZATION
241
Wednesday, November 20, 2013
ADMINISTRATIVE SESSION
ADOPTION OF BOARD COMMITTEE REPORT AND APPROVAL OF COMMITTEE ACTIONS
Business Taxes Committee (Continued)
Action:
The Board deferred the matter to December 2013.
The Board adjourned at 2:34 p.m.
The foregoing minutes are adopted by the Board on March 25, 2014.
Note: The following matters were removed from the calendar prior to the meeting: Special
Presentation-Award Presentation; Schoettler Tire, Inc., 522013 (DF); Ricky Alan Dumas,
547380 (KH); James J. Barbera, Jr., 526563, 526564, 526565 (BH); Jafar Rezaian, 467747
(JH); Sheakh Sahib, 589643 (BH); Executive Director’s Report: 2014 Board Calendar Update;
and, Sales and Use Tax Deputy Director’s Report: Security Deposit Program.
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