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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION 215

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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION 215
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
215
Wednesday, November 14, 2012
The Board met at its offices at 450 N Street, Sacramento, at 10:00 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.
CORPORATE FRANCHISE AND PERSONAL INCOME TAXES HEARING
Anser Hassan, 536983
2003, $26,680.00 Tax, $6,670.00 Late Filing Penalty
For Appellant:
Anser Hassan, Taxpayer
For Franchise Tax Board:
Sonia Deshmukh, Tax Counsel
Shane Hofeling, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether appellant has demonstrated error in respondent’s determination of a
capital gain arising from the sale of personal residence.
Whether appellant has shown that he is entitled to an increase in deductions
related to the personal residence.
Whether appellant is entitled to use head of the household filing status for 2003.
Appellant’s Exhibit:
Miscellaneous Documents (Exhibit 11.1)
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.
Exhibits to these minutes are incorporated by reference.
Joann Richmond, Chief, Board Proceedings Division, stated for the record that
the appellant in the matter of Gregory P. Hovious, 563150; withdrew his appeal, therefore the
matter is dismissed.
SALES AND USE TAX APPEALS HEARINGS
James Michael Duggan, 441787 (UT)
3-9-04, $2,175.00 Tax, $0.00 Finality Penalty
For Taxpayer:
James Michael Duggan, Taxpayer
James M. Bracken, Representative
For Sales and Use Tax Department:
Kevin Smith, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether taxpayer’s purchase and use of the vehicle is subject to California use
tax.
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.
216
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
DK Supplies, Inc., 509933 (EA)
4-1-06 to 3-31-09, $168,676.46 Tax, $16,867.64 Negligence Penalty
For Petitioner:
No Appearance
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether adjustments are warranted to the disallowed claimed nontaxable sales
for resale.
Action:
The Board denied the petitioner’s request for postponement and deferred
consideration of the matter to the following day.
Global Air Com, Inc., 488913 (GH)
4-1-05 to 7-31-06, $129,454.50 Tax, $0.00 Negligence Penalty
Global Air Connection, LLC, 488785 (GH)
2-1-06 to 3-31-08, $131,231.07 Tax, $0.00 Negligence Penalty
For Petitioners:
Tran La, Witness
Kim Phan, Witness
Trevor Zink, Attorney
For Sales and Use Tax Department:
Scott Claremon, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to unreported sales.
Whether relief of interest is warranted.
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 petition be submitted for decision.
The Board recessed at 12:32 p.m. and reconvened at 1:54 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
East Bay Supply, Inc., 436174 (CH)
7-1-01 to 6-30-04, $174,572.41 Tax
For Petitioner:
Jesse W. McClellan, Representative
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether petitioner has shown that additional adjustments to the audited amount
of understated taxable sales are warranted.
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.
The Board recessed at 3:27 p.m. and reconvened at 3:34 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
217
Wednesday, November 14, 2012
SPECIAL PRESENTATION
Presentation of Board Resolution to Regina V. Evans-Jarrett
On behalf of the Board, Mr. Horton presented to Regina V. Evans-Jarrett, Chief
of Staff, Fourth District, a resolution, extending its sincere and grateful appreciation for her
dedicated service to the State Board of Equalization and the State of California (Exhibit 11.2).
Members made complementary remarks regarding their experiences working with Mrs. EvansJarrett. Mrs. Evans-Jarrett thanked the Members, and made complementary remarks regarding the
Executive Director, and thanked the Deputy Directors for their helpfulness in the Executive
Director’s absence, and thanked staff for their support.
SALES AND USE TAX APPEALS HEARINGS
Sheakh Sahib, 457738 (BH)
7-1-04 to 6-30-07, $50,368.40 Tax, $0.00 Negligence Penalty
For Petitioner:
M. Ali D. George, Representative
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether petitioner has established that further reductions to the audited
understatement of taxable gasoline sales are warranted.
Whether petitioner has established that relief from any portion of the interest is
warranted.
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.
Ann L. Diley, 416784 (OH)
1-1-96 to 3-1-98, $37,353.26 Claim for Refund
For Claimant:
Jesse W. McClellan, Representative
For Sales and Use Tax Department:
Scott Claremon, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether the Board’s levy was invalid.
Whether the claim for refund should be granted because claimant is entitled to
relief from liability as an innocent spouse.
Whether the levied funds represent claimant’s sole and separate property, which
cannot be taken to satisfy Mr. Diley’s unpaid tax debts.
Whether the levied funds were protected under the Homestead Act.
Whether the liability upon which the Notice of Levy is based is invalid because it
was incorrectly determined against Mr. Diley as a sole proprietor when, in fact, the liability was
that of Betty Elyse Properties, Inc., and whether adjustments are warranted to the underlying
liability.
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 claim be submitted for decision.
218
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
S & C Motors, 468140 (BH)
7-1-01 to 12-31-02, $214,572.66 Tax
For Petitioner:
Mark A. Wasser, Attorney
Alan Feld, Witness
For Sales and Use Tax Department:
Monica Silva, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether petitioner was the retailer for the sales at issue.
Whether an adjustment is warranted to the amount of disallowed exempt sales in
interstate commerce.
Whether relief is warranted under Revenue and Taxation Code section 6596
because petitioner’s failure to remit the tax was due to its reasonable reliance on written advice
from the Board.
Whether relief of interest is warranted under section 6593.5.
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.
Benjamin Rojas, 546335 (CH)
7-1-06 to 6-30-09, $23,455.47 Tax, $2,345.54 Negligence Penalty
For Petitioner:
Benjamin Rojas, 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 unreported taxable sales.
Whether petitioner was negligent.
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.
PUBLIC HEARING
Proposed Adoption of Amendments to Property Tax Rules 101, Board-Prescribed
Exemption Forms, 171, Board-Prescribed Forms for Property Statements, 252,
Content of Assessment Roll, and 1045, Administration of the Annual Racehorse
Tax
Bradley Heller, Tax Counsel, Tax and Fee Programs Division, Legal Department,
was available to answer questions regarding the proposed adoption of amendments to Property
Tax Rules 101, 171, 252, and 1045, which clarify the provisions regarding the use of Boardprescribed property tax forms, and the requirements for local assessment rolls (Exhibit 11.3).
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 to Property Tax Rules 101, 171, 252, and 1045 as recommended by staff.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
219
Wednesday, November 14, 2012
LEGAL APPEALS MATTERS, CONSENT
The Board deferred consideration of the following matter: Elizabeth Shutters,
Inc., 538185 (EH).
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:
Wendell Daran Ferguson, 549115 (CH)
1-1-06 to 6-30-06, $1,667.50 Tax, $335.85 Finality Penalties, $87.32 Late Prepayment Penalty
Action:
Redetermine as recommended by the Appeals Division.
Hubert Daniel, 520133 (KH)
10-1-03 to 9-30-05, $0.00 Tax, $2,128.70 Late Payment Penalties
Action:
Redetermine as recommended by the Appeals Division.
James Rexford Hudson, Jr. and Roberta Lee Hudson, 423020, 586244 (CH)
4-1-08 to 6-30-03, $191,984.69 Tax, $47,996.17 Fraud Penalty, $18,565.01 Finality Penalty
Action:
No further adjustments be made in the administrative protest and deny the claim
for refund as recommended by the Appeals Division.
Daryle Franklin Lupretta, 547396, 586222 (GH)
7-1-06 to 8-31-09, $16,504.74 Tax, $1,650.50 Negligence Penalty
Action:
Deny the claim for refund and redetermine as recommended by the Appeals
Division.
John Thomas Crowley and Anne-Laure Crowley, 468395, 556738 (JH)
12-1-06 to 12-31-09, $5,254.23 Tax
Action:
Deny the claim for refund and redetermine as recommended by the Appeals
Division.
Jessica Meza and John R. Meza, 533998 (CH)
1-1-07 to 3-31-08, $101,392.05 Tax, $10,139.23 Negligence Penalty, $10,139.21 Finality Penalty
Action:
No adjustments be made in the administrative protest as recommended by the
Appeals Division.
Rajpal Singh Bhullar and Sherpunjab Singh Bhullar, 533531 (KH)
1-1-07 to 3-31-09, $63,840.15 Tax, $0.00 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Harpreet Kaur, 536914 (CH)
10-1-06 to 9-30-09, $17,185.84 Tax, $1,539.25 Negligence Penalty, $179.27 Failure to File
Penalty
Action:
Redetermine as recommended by the Appeals Division.
220
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
Khalil Tahiry, 473076 (CH)
7-1-04 to 6-30-07, $14,551.00 Tax, $0.00 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Appleton Tincheung Yum, 464485 (BH)
7-1-04 to 6-30-07, $71,717.21 Tax, $7,171.77 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Ferede Beyene Negash and Lielti Desta Mesfi, 444110, 479018, 512038, 512039,
512040, 608101 (GH)
1-1-05 to 12-31-07, $14,185.86 Tax, $1,418.62 Negligence Penalty
2-1-05 to 2-28-05, $884.97 Claim for Refund
7-1-08 to 9-30-08, $63.00 Tax
1-1-09 to 3-31-09, $281.00 Tax
10-1-08 to 12-31-08, $166.00 Tax
4-1-01 to 4-30-03, $5,016.00 Claim for Refund
Action:
Deny the claims for refund and redetermine as recommended by the Appeals
Division.
Cal-Door Enterprises of Northern California, 525159 (CH)
1-1-06 to 3-30-09, $276,028.78 Tax, $27,602.92 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Swertfeger’s Equipment, Inc., 420299, 431085 (EH)
1-1-02 to 6-30-05, $57,162.22 Tax
1-1-05 to 3-31-05, $15,919.00 Claim for Refund
Action:
Deny the petition for rehearing as recommended by the Appeals Division.
Elizabeth Shutters, Inc., 538185 (EH)
10-1-05 to 9-30-08, $1.00 or more Claim for Refund
Action:
The Board took no action.
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS, CONSENT
The Board deferred consideration of the following matters: Cam Painting, Inc.,
531722; James A. Haverkamp, 550350; and, J.N.D. Thomas Company, Inc., 563994.
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:
Jose A. Magdaleno, 573105
2008, $994.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
221
Wednesday, November 14, 2012
Joseph E. Sloan, 576927
2006, $6,412.00 Tax, $1,603.00 Late Filing Penalty, $1,282.40 Accuracy-Related Penalty
Action:
Modify the action with concession by the Franchise Tax Board.
Gregory Stover, 572570
2008, $964.00 Tax, $241.00 Late Filing Penalty, $243.75 Demand Penalty
Steven Olmos, 572574
2008, $25,483.00 Tax, $6,370.75 Late Filing Penalty, $6,370.75 Demand Penalty
Alexander H. Watts, 587892
2009, $931.00 Tax, $232.75 Late Filing Penalty, $232.75 Demand Penalty
Benjamin F. Killen, 597598
2008, $1,776.00 Tax, $444.00 Late Filing Penalty, $444.00 Demand Penalty
Action:
Sustain the action of the Franchise Tax Board and impose frivolous appeal
penalties in the following amounts: Case No. 572570 $2,500.00; Case No. 572574 $5,000.00;
Case No. 587892 $750.00; and, Case No. 597598 $5,000.00.
Daryl Asato, 574540
2008, $1,240.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Pandora Bethea, 593572
2009, $944.00 Tax, $236.00 Failure to Furnish Information Penalty
Action:
Sustain the action of the Franchise Tax Board.
Patricia Bragg, 567669
2005, $293,020.00 Tax, $57,188.00 Accuracy Related Penalty
Action:
Modify the action with concession by the Franchise Tax Board.
William C. Bryan, 556203
2008, $789.50 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Cam Painting, Inc., 531722
2004, $89,570.50 Assessment
Action:
The Board took no action.
Al Dalupan, 562387
2005, $1,570.00 Assessment
Action:
Modify the action with concession by the Franchise Tax Board.
DG Resource, LLC, 575594
2010, $800.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
222
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
Scott Grossman, 566834
2007, $6,817.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
James A. Haverkamp, 550350
2006, $95.17 Interest
Action:
The Board took no action.
Mark Alan Hoffman and Clementina M. Hoffman, 559879
2008, $600.23 Tax, $2,646.48 Late Payment Penalty
Action:
Sustain the action of the Franchise Tax Board.
Hunter Living Trust B, 547008
2002, $895,271.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
J.N.D. Thomas Company, Inc., 563994
2006, $47,038.01 Assessment
Action:
The Board took no action.
Lee & Jackson Financial Services, Inc., 577560
2008, $5,731.46 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Ruby Lemos, 576844
2007, $420.00 Claim for Refund
2008, $816.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Muddhouse Coffee, LLC, 586680
2008, $20,084.01 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Nancy A. Nugent, 592016
2008, $5,506.40 Late Payment Penalty, $562.40 Estimated Tax Penalty
Action:
Sustain the action of the Franchise Tax Board.
William P. Shannahan, 561554
2001, $9,393.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
SUP, Inc., 571262
2008, $800.00 Tax, $200.00 Late Filing Penalty, $200.00 Demand Penalty
Action:
Modify the action with concession by the Franchise Tax Board.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
223
Wednesday, November 14, 2012
Tech Agricultural, Inc., 565933
2007, $94,735.00 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
SALES AND USE TAX MATTERS, REDETERMINATIONS, DENIALS OF CLAIMS
FOR REFUND, CONSENT
With respect to the Sales and Use Tax Matters, Redeterminations, Denials of
Claims for Refund, 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:
Peet’s Coffee & Tea, Inc., 586628 (CH)
4-1-06 to 6-30-09, $315,109.66
Action:
Approve the redetermination as recommended by staff.
R.W. Smith & Co., 576394 (FH)
7-1-05 to 6-30-08, $125,276.97
Action:
Approve the redetermination as recommended by staff.
Kars To Go, Inc., 546570 (FH)
4-1-05 to 3-31-08, $144,712.61
Action:
Approve the redetermination as recommended by staff.
Ingersoll-Rand Company, 589948 (OH)
1-1-05 to 12-31-09, $368,463.58
Action:
Approve the denial of claim for refund as recommended by staff.
Nokia, Inc., 558563 (OH)
1-1-08 to 9-30-09, $291,105.21
Action:
Approve the denial of claim for refund as recommended by staff.
SALES AND USE TAX MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
CONSENT
The Board deferred consideration of the following matters: HSBC Automotive
Finance, Inc., 462820 (FH); and, HSBC Automotive Finance, Inc., 425873 (FH).
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,
the Board made the following orders:
G-Two Graphic Service, Inc., 300436 (AC)
1-1-02 to 12-31-07, $974,700.11
Action:
Approve the refund as recommended by staff.
224
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
Super Photo Laboratory, Inc., 450706 (AS)
1-1-05 to 7-31-09, $117,806.82
Action:
Approve the refund as recommended by staff.
Hanson Structural Precast, 606056 (OH)
7-1-09 to 6-30-11, $193,964.09
Action:
Approve the refund as recommended by staff.
Insync Media, 400775 (AS)
1-1-06 to 11-28-07, $315,343.52
Action:
Approve the refund as recommended by staff.
Jaco Oil Company, 596440 (AR)
10-1-08 to 9-30-11, $208,200.48
Action:
Approve the refund as recommended by staff.
Thomas Jay Jamieson, 596439 (AR)
10-1-08 to 9-30-11, $191,315.61
Action:
Approve the refund as recommended by staff.
Marchbanks Truck Service, Inc., 613610 (AR)
7-1-10 to 3-31-12, $131,141.00
Action:
Approve the refund as recommended by staff.
Inland Empire Utilities Agency, 614042 (EH)
4-1-08 to 6-30-11, $203,709.29
Action:
Approve the refund as recommended by staff.
Sanmina-Sci Corporation, 613282 (GH)
10-1-07 to 3-31-10, $489,670.52
Action:
Approve the refund as recommended by staff.
The Boeing Company, 597763 (OH)
10-1-05 to 9-30-10, $2,238,223.77
Action:
Approve the refund as recommended by staff.
Ingersoll-Rand Company, 589948 (OH)
1-1-05 to 12-31-09, $775,881.42
Action:
Approve the refund as recommended by staff.
Gep Leasing, Inc., 626365 (OH)
7-1-06 to 6-30-09, $111,485.63
Action:
Approve the refund as recommended by staff.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
225
Wednesday, November 14, 2012
Nokia, Inc., 558563 (OH)
1-1-08 to 9-30-09, $561,995.29
Action:
Approve the refund as recommended by staff.
Mc-Donnell Douglas Corporation, 613523 (OH)
1-1-06 to 12-31-09, $452,063.67
Action:
Approve the refund as recommended by staff.
Northrop Grumman Systems Corporation, 476959 (OH)
1-1-02 to 12-31-07, $1,399,409.23
Action:
Approve the refund as recommended by staff.
Fastrip Oil Company, LP, 596435 (AR)
10-1-08 to 9-30-11, $103,378.09
Action:
Approve the refund as recommended by staff.
HSBC Automotive Finance, Inc., 462820 (FH)
1-1-08 to 6-30-10, $11,740,278.58
Action:
The Board took no action.
HSBC Automotive Finance, Inc., 425873 (FH)
1-1-05 to 12-31-07, $1,526,991.48
Action:
The Board took no action.
Michaels Stores Procurement Company, Inc., 572809 (OH)
10-1-06 to 9-30-10, $1,003,476.19
Action:
Approve the refund as recommended by staff.
WMC-A, Inc., 535427 (EA)
4-1-07 to 6-30-11, $131,643.89
Action:
Approve the refund as recommended by staff.
Chapman Medical Center, Inc., 535429 (EA)
4-1-07 to 3-31-10, $142,199.74
Action:
Approve the refund as recommended by staff.
Citigroup, Inc. & Subsidiaries & Affiliates, 526524 (OH)
7-1-08 to 12-31-10, $8,046,534.87
Action:
Approve the refund as recommended by staff.
Daniels Sharpsmart, Inc., 561182 (OH)
12-1-04 to 12-31-06, $119,587.41
Action:
Approve the refund as recommended by staff.
226
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
American Stores Company, LLC, 422010 (OH)
6-2-06 to 6-30-09, $1,388,411.58
Action:
Approve the refund as recommended by staff.
Compound Focus, Inc., 613557 (BH)
10-1-08 to 9-30-11, $121,757.55
Action:
Approve the refund as recommended by staff.
The MT Group, Inc., 573025 (AC)
1-18-10 to 3-31-11, $192,868.98
Action:
Approve the refund as recommended by staff.
K B A North America, Inc., 620863 (OH)
4-1-11 to 6-30-11, $275,454.00
Action:
Approve the refund as recommended by staff.
SPECIAL TAXES MATTERS, RELIEF OF PENALTIES, CONSENT
With respect to the Special Taxes Matters, Relief of Penalties, Consent Agenda,
upon a single 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 orders:
Flyers Energy, LLC, 627022 (MT)
12-1-10 to 12-31-10, $302,140.40
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
California Capital Insurance Co., 627272 (ET)
10-1-11 to 12-31-11, $141,317.29
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
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, Mr. Runner and Ms. Mandel voting yes, the Board made the
following order:
TA Operating, LLC, 589763 (MT)
1-1-11 to 2-28-11, $274,218.46
Action:
Approve the refund as recommended by staff.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
227
Wednesday, November 14, 2012
PROPERTY TAXES MATTERS, CONSENT
With respect to the Property Taxes Matters, Consent Agenda, upon a single
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 orders:
Petitions for Reassessment of Unitary Value
Golden State Water Company (101), 621371
2012, $590,600,000.00 Unitary Value
Action:
Reduce the 2012 unitary value to $582,900,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
GenOn Energy West, LP – Mandalay (1114), 621405
2012, $53,100,000.00 Unitary Value
Action:
Reduce the 2012 unitary value to $45,300,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
GenOn Energy West, LP – Etiwanda (1116), 621411
2012, $40,400,000.00 Unitary Value
Action:
Reduce the 2012 unitary value to $36,400,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Pay-Less Cellular, Inc. (2683), 621456
2012, $2,480,000 Unitary Value, $248,000.00 Penalty
Action:
Reduce the 2012 unitary value to $62.100.00 and reduce the penalty amount to
$6,210.00 as recommended by staff. Ms. Mandel not participating in accordance with
Government Code section 7.9.
XO Communications, Services, LLC (7560), 612561
2012, $114,100,000 Unitary Value
Action:
Reduce the 2012 unitary value to $100,200,000.00 as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Petitions for Penalty Abatement on Unitary Value
Cal-Ore Communications, Inc. (8079), 612598
2012, $55,600.00 Penalty
Action:
Approve the penalty abatement on 2012 unitary value as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
California Broadband Cooperative, Inc. (8139), 620618
2012, $35,900.00 Penalty
Action:
Approve the penalty abatement on 2012 unitary value as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
CENIC Broadband Initiatives, LLC (8141), 613830
2012, $55,500.00 Penalty
Action:
Approve the penalty abatement on 2012 unitary value as recommended by staff.
Ms. Mandel not participating in accordance with Government Code section 7.9.
Digital West Networks, Inc. (8148), 621343
2012, $131,000.00 Penalty
Action:
Approve the penalty abatement on 2012 unitary value 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 matters: Southern California
Edison Company (148), 614402; High Desert Power Trust 2000-A (1127), 620705; Delta Energy
Center, LLC (1128), 620699; Pastoria Energy Facility (1131), 620700; Calpine Construction
Finance Company, LP (1132), 620702; Metcalf Energy Center, LLC (1133), 620703; and, Otay
Mesa Generating Company, LLC (1134), 620704.
With respect to the Legal Appeals Property Taxes Matters, Consent Agenda,
upon a single motion of Ms. Steel, 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:
Petitions for Reassessment of Unitary Value
Central Valley Gas Storage, LLC (104), 621332
2012, $123,400,000.00 Unitary Value
Action:
Reduce the 2012 unitary value to $95,800,000.00 as recommended by the
Appeals Division. Ms. Mandel not participating in accordance with Government Code
section 7.9.
Gill Ranch Storage, LLC (121), 621414
2012, $167,200,000.00 Unitary Value
Action:
Reduce the 2012 unitary value to $148,000,000.00 as recommended by the
Appeals Division. Ms. Mandel not participating in accordance with Government Code
section 7.9.
Southern California Edison Company (148), 614402
2012, $18,119,500,000.00 Unitary Value
Action:
The Board took no action.
High Desert Power Trust 2000-A (1127), 620705
2012, $278,600,000.00 Unitary Value
Action:
The Board took no action.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
229
Wednesday, November 14, 2012
Delta Energy Center, LLC (1128), 620699
2012, $381,500,000.00 Unitary Value
Action:
The Board took no action.
Pastoria Energy Facility (1131), 620700
2012, $372,300,000.00 Unitary Value
Action:
The Board took no action.
Calpine Construction Finance Company, LP (1132), 620702
2012, $173,800,000.00 Unitary Value
Action:
The Board took no action.
Metcalf Energy Center, LLC (1133), 620703
2012, $282,200,000.00 Unitary Value
Action:
The Board took no action.
Otay Mesa Generating Company, LLC (1134), 620704
2012, $367,900,000.00 Unitary Value
Action:
The Board took no action.
La Paloma Generating Company, LLC (1112), 621350
2012, $401,900,000.00 Unitary Value
Action:
Reduce the 2012 unitary value to $377,600,000.00 as recommended by the
Appeals Division. Ms. Mandel not participating in accordance with Government Code
section 7.9.
LEGAL APPEALS MATTERS, ADJUDICATORY
Fence America, Inc., 479354 (KH)
1-1-04 to 12-31-06, $361,344.77 Tax
Considered by the Board: May 30, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
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 petition be redetermined as recommended by the Appeals Division.
Louis John Bonacich, Jr., 493991, 568375, (KH)
1-1-04 to 12-31-06, $6,485.58 Tax, $648.61 Negligence Penalty
Considered by the Board: May 30, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
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 petition be redetermined as recommended by the Appeals Division.
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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
Loh Sun International, Inc., Kent La, Nancy La and John La, 480987, 480989, 506428 (ET)
1-1-01 to 6-30-03, $2,049,540.00 Tax, $512,385.00 Fraud Penalty
7-1-03 to 7-31-03, $60,117.00 Tax, $15,029.25 Fraud Penalty
7-1-03 to 7-31-03, $133,110.00 Tax, $33,277.50 Fraud Penalty
Considered by the Board: April 26, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Steel, seconded by Mr. Runner and duly carried,
Mr. Horton, Ms. Steel and Mr. Runner voting yes, Ms. Yee and Ms. Mandel voting no, the Board
ordered that the petition for rehearing be granted.
William Blaine Riggle, 417558, 417559 (FH)
7-1-01 to 8-31-04, $551,272.00 Tax, $55,127.20 Late Payment Penalty, $3,480.10 EFT Penalty,
$6,774.60 EFT Prepayment Penalty
4-1-04 to 7-31-04, $$25,040.46 Tax, $3,391.20 Late Payment Penalty
Considered by the Board: February 1, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Mr. Runner moved that the petition for rehearing be granted. The motion was
seconded by Ms. Steel but failed to carry, Ms. Steel and Mr. Runner voting yes, Mr. Horton and
Ms. Yee voting no, Ms. Mandel abstaining.
Upon motion of Mr. Runner, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board rescinded its
prior vote.
The Board deferred further consideration of the matter to the following day.
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS,
ADJUDICATORY
RMDI Corporation, 594848
2008, $65,484 Claim for Refund
Considered by the Board: October 23, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
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 adopted a
decision sustaining the action of the Franchise Tax Board.
Tim Barth and Teri Barth, 562294
2008, $951.75 Assessment
Considered by the Board: August 21, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Ms. Steel voting no, the Board adopted a
decision denying the petition for rehearing.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
231
Wednesday, November 14, 2012
Ali Amidy and Guiti Nahavandi, 524954
2004, $111,346.00 Tax, $19,911.40 Accuracy-Related Penalty
Considered by the Board: March 20, 2012
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 modified the
action of the Franchise Tax Board.
TAX PROGRAM NONAPPEARANCE MATTERS NOT SUBJECT TO CONTRIBUTION
DISCLOSURE STATUTE
OFFER-IN-COMPROMISE RECOMMENDATIONS
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 approved the
Offer in Compromise Recommendations of Lisa Renee Bach; James Anthony DiPinto; Douglas
C. Erickson; Michael C. Fikaris; Primitivo Guzman; Maria Elena Guzman; Gary Michael
Lawson, Sr.; Frank T. Marino; Michael Alan Morales; and, Terry L. Scheurer; as recommended
by staff.
LOCAL TAX REALLOCATION MATTERS
Cities of Agoura Hills, Alameda, Albany, Bakersfield, Belmont, Berkeley, Beverly Hills,
Brisbane, Calabasas, Campbell, Carlsbad, Chula Vista, Clovis, Compton, Cupertino,
Daly City, Davis, Delano, Del Mar, East Palo Alto, El Cajon, El Monte, Emeryville,
Escondido, Fillmore, Foster City, Fremont, Fresno, Gardena, Gilroy, Half Moon Bay,
Hawthorne, Hayward, Kerman, Kingsburg, Los Angeles, Menlo Park, Milpitas, Moreno
Valley, Morgan Hill, Palmdale, Palo Alto, Pasadena, Rancho Cordova, Rancho Palos
Verdes, Redwood City, Reedley, Ridgecrest, Rolling Hills Estates, Roseville,
Sacramento, San Bruno, San Diego, Sanger, San Jose, San Leandro, San Mateo, Santa
Clara, Santa Fe Springs, Saratoga, Selma, Shafter, South San Francisco, Torrance,
Union City, Westlake Village, West Sacramento, Woodland, Town of Los Gatos,
Counties of Los Angeles and Sacramento, and City and County of San Francisco,
469672
6-1-06 to 12-31-11, $1,955,220.00 Tax
Considered by the Board: Memorandum Opinion
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Ms. Steel voting no, Mr. Runner not participating, the
Board adopted the Memorandum Opinion Alternative 1 as presented by staff.
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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, November 14, 2012
ANNOUNCEMENT OF CLOSED SESSION
The Board recessed at 7:50 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 pending litigation (Gov. Code § 11126(e)), settlements
(Rev. & Tax. Code §§ 6901, 7093.5, 30459.1 and 50156.11) and personnel matters (Gov. Code §
11126(a)).
The Board recessed at 8:29 p.m. and reconvened immediately in open session
with Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
Mr. Horton announced the appointment of Randy Silva to the position of Chief,
Investigations and Special Operations Division, Legal Department.
The Board recessed at 8:31 p.m.
The foregoing minutes are adopted by the Board on June 11, 2013.
Note: The following matters were removed from the calendar prior to the meeting: Angela Leiva
and Abundio Hernandez, 514979 (CH); Noorneel, Inc., 538911 (CH); Amar Abdo Alamary,
513144 (KH); Sweetwater Restaurants, LLC, 491317 (KH); Rent-A-Center West, Inc., 484209
(OH); and, Hukilau, LLC, 533841 (BH).
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
233
Thursday, November 15, 2012
The Board met at its offices at 450 N Street, Sacramento, at 9:35 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.
ADMINISTRATIVE SESSION
OTHER ADMINISTRATIVE MATTERS
Technology Deputy Director’s Report
Brenda Fleming, Chief Information Officer and Deputy Director, introduced
Carlos Ramos, Secretary of the California Technology Agency, who provide a presentation on the
overall state information technology strategy, role and responsibilities of the State’s Chief
Information Officer, and implications of the Governor’s Reorganization Plan (GRP)
(Exhibit 11.4).
Exhibits to these minutes are incorporated by reference.
The Board recessed at 10:18 a.m. and reconvened at 10:56 a.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
SALES AND USE TAX APPEALS HEARING
Walid Khaled Awwad, 512991 (GH)
1-1-01 to 3-31-08, $0.00 Tax, $44,568.65 Fraud Penalty, $20,162.96 Tax Collected But Not
Remitted Penalty, $7,232.02 Amnesty Double Fraud Penalty
For Petitioner:
Abe Golomb, Representative
For Sales and Use Tax Department:
Lawrence Mendel, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether the Department has established fraud by clear and convincing evidence.
Whether the 40 percent penalty for tax reimbursement collected and not timely
remitted as sales tax was properly imposed.
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.
SPECIAL TAXES APPEALS HEARINGS
Akop Jack Chichyan, Vicken Djeredjian and Mnatsakan Mike Grigoryan, 388129 (ET)
10-1-00 to 2-28-02, $3,001,500.00 Tax, $750,375.00 Fraud Penalty, $300,150.00 Failure to File
Penalty
For Petitioners:
Vicken Djeredjian, Taxpayer
Abe Golomb, Representative
For Property and Special Taxes Department:
Pamela Mash, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether further adjustments are warranted to the measure of tax.
Whether the failure-to-file penalty should be relieved.
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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, November 15, 2012
Whether the 25-percent penalty for fraud or intent to evade is supported by clear
and convincing evidence.
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.
Retailers License Denial Appeal Hearing
Cig Row, Inc., 588150 (ET)
8-2-11 Date of Citation
For Petitioner:
Caitlin Anne Colman, Representative
Patrick Finnegan, Representative
Caitlin Colman, Representative
For Property and Special Taxes Department:
Pamela Mash, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether the Special Taxes and Fees Division of the Property and Special Taxes
Department properly denied petitioner’s application for a Cigarette and Tobacco Products
Retailer’s license.
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.
CHIEF COUNSEL MATTERS
RULEMAKING
Section 100 Changes to Alcoholic Beverage Tax Regulations 2558 through 2559.5
Bradley Heller, Tax Counsel, Tax and Fee Programs Division, Legal Department,
was available to answer questions regarding the request for authorization to complete Rule 100
changes repealing the regulations in conformity with a published opinion from the Court of
Appeal (Exhibit 11.5).
Action:
Upon motion of Ms. Mandel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board approved the
section 100 changes as recommended by staff.
ADMINISTRATIVE SESSION
ADMINISTRATIVE MATTERS, CONSENT
The Board deferred consideration of the following matters: Adoption of Affidavit
of Cotenant Residency, form BOE-58-H; and, Adoption of revisions to Change in Ownership
Statement, Death of Real Property Owner, form BOE-502-D.
With respect to the Administrative Matters, Consent Agenda, upon a single
motion of Mr. Runner, 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:
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
235
Thursday, November 15, 2012
Action:
Adopt the Board Resolution for Regina Evans-Jarrett (see Exhibit 11.2).
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 11.6).
Eyoline S. Antonio, Tax Techinician III, Culver City District Office
Richard Cohen (Revised), Business Taxes Compliance Supervisor II, West
Covina District Office
Claudia Gilbreath, Tax Technician III, Sales and Use Tax Department,
Headquarters
Pamela J. Hartman, Associate Tax Auditor, Houston District Office
Steven Mark Kamp, Tax Counsel III (Specialist), Legal Department,
Headquarters
Carole N. Kellogg, Business Taxes Specialist I, Sales and Use Tax Department,
Headquarters
Connie P. Lopez, Tax Technician III, West Covina District Office
Nancy MacIntosh, Executive Secretary I, Sales and Use Tax Department,
Headquarters
Aloy E. Nwasu, Associate Tax Auditor, New York District Office
Maria Christina Siegfried, Tax Technician III, Norwalk District Office
Tammie Tessier-Jennings, Northern California Area Administrator,
Investigations Division
Maywood Wong, District Principal Compliance Supervisor, Irvine District Office
Action:
Approve the Board Meeting Minutes of May 30-31, 2012.
Action:
Approve Assessors' Handbook Section 581, Equipment and Fixtures Index,
Percent Good and Valuation Factor (Exhibit 11.7).
Action:
Approve the 2013 Timberland Production Zone Values as recommended by staff
(Exhibit 11.8).
Action:
Approve the backfill determination of $15 million for fiscal year 2011-12 for the
effects of Proposition 10 on cigarette and tobacco products consumption as recommended by staff
(Exhibit 11.9).
OTHER ADMINISTRATIVE MATTERS
Executive Director’s Report
Cynthia Bridges, Executive Director, provided a report regarding the progress on
the CROS project to replace BOE’s two current tax legacy technology systems.
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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, November 15, 2012
Property and Special Taxes Deputy Director’s Report
David Gau, Deputy Director, Property and Special Taxes Department, provided a
report regarding the Fire Prevention Fee Program (Exhibit 11.10).
Ms. Steel requested staff’s assistance in resolving fees that were assessed on
formerly inhabitable structures that no longer exist.
Ms. Yee requested that staff document problems encountered with implementing
the fee with respect to BOE resources, and investigate/evaluate alternatives to seasonal
employees and overtime.
Mr. Runner requested staff to provide an update on collection costs for fire
prevention fee noncompliance thus far and recalculate estimates for future collection costs.
Mr. Horton directed staff to make a public quarterly report to the Legislature on
these items that includes the challenges BOE faces, as well as the benefits.
The Board recessed at 12:38 p.m. and reconvened at 12:46 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
LEGAL APPEALS MATTER, ADJUDICATORY
William Blaine Riggle, 417558, 417559 (FH) (continued from November 14, 2012)
7-1-01 to 8-31-04, $551,272.00 Tax, $55,127.20 Late Payment Penalty, $3,480.10 EFT Penalty,
$6,774.60 EFT Prepayment Penalty
4-1-04 to 7-31-04, $$25,040.46 Tax, $3,391.20 Late Payment Penalty
Considered by the Board: February 1, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
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 for rehearing be granted.
FINAL ACTION ON CORPORATE FRANCHISE AND PERSONAL INCOME TAXES
HEARING HELD NOVEMBER 14, 2012
Anser Hassan, 536983
Final Action: Ms. Steel moved to allow $42,000 in home improvements and a property tax
credit of $6,962.04. The motion was seconded by Mr. Runner. Ms. Steel withdrew the motion.
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 a
property tax credit of $6,962.04 be allowed and otherwise sustained the action of the Franchise
Tax Board.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
237
Thursday, November 15, 2012
FINAL ACTION ON SALES AND USE TAX APPEALS HEARINGS HELD
NOVEMBER 14, 2012
DK Supplies, Inc., 509933 (EA)
Final 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.
James Michael Duggan, 441787 (UT)
Final Action: Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Steel, Ms. Yee and Ms. Mandel voting yes, Mr. Runner voting no, the Board ordered that no
further adjustments be made in the administrative protest as recommended by the Appeals
Division.
Global Air Com, Inc., 488913 (GH)
Global Air Connection, LLC, 488785 (GH)
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 ordered that
the petition be redetermined as recommended by the Appeals Division.
East Bay Supply, Inc., 436174 (CH)
Final Action: Upon motion of Mr. Runner, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board
acknowledged the 28 percent markup for the period July 2001 through December 2001, and
ordered that the audited taxable markup of 28 percent for the balance of the period be reduced to
22 percent.
Sheakh Sahib, 457738 (BH)
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 ordered that
the petition be redetermined as recommended by the Appeals Division.
Ann L. Diley, 416784 (OH)
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 ordered the
claim denied as recommended by the Appeals Division.
S & C Motors, 468140 (BH)
Final Action: Mr. Runner moved that the petition for redetermination be granted. The motion
was seconded by Ms. Steel but failed to carry, Ms. Steel and Mr. Runner voting yes, Mr. Horton,
Ms. Yee and Ms. Mandel voting no.
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 the
interest relieved for the period July 2007 through September 2008, and that the petition otherwise
be redetermined as recommended by the Appeals Division.
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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, November 15, 2012
Benjamin Rojas, 546335 (CH)
Final Action: Ms. Steel moved to deleted the negligence penalty, and that the petition
otherwise be redetermined as recommended by the Appeals Division. The motion was seconded
by Ms. Yee. Ms. Steel withdrew the motion.
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 the
measure of tax further reduced to allow 15 percent of petitioner’s sales as sales for resale, and the
negligence penalty deleted, and that the petition otherwise be redetermined as recommended by
the Appeals Division.
FINAL ACTION ON SALES AND USE TAX APPEAL HEARING HELD
NOVEMBER 15, 2012
Walid Khaled Awwad, 512991 (GH)
Final Action: Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Ms. Steel voting no, the Board ordered that the
petition be redetermined as recommended by the Appeals Division, noting for the record that the
40 percent penalty for sales tax reimbursement collected and not remitted is an evasion penalty.
FINAL ACTION ON SPECIAL TAXES APPEALS HEARINGS HELD
NOVEMBER 15, 2012
Akop Jack Chichyan, Vicken Djeredjian and Mnatsakan Mike Grigoryan, 388129 (ET)
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 that
the petition be redetermined as recommended by the Appeals Division.
Retailers License Denial Appeal Hearing
Cig Row, Inc., 588150 (ET)
Final Action: Upon motion of Ms. Mandel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board determined
that staff properly denied the application for a Cigarette and Tobacco Products Retailer’s License,
as recommended by the Appeals Division.
ADMINISTRATIVE SESSION
ADOPTION OF BOARD COMMITTEE REPORT AND APPROVAL OF COMMITTEE ACTIONS
Property Tax Committee
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
Property Tax Committee report and the actions therein (Exhibit 11.11).
The Board recessed at 1:20 p.m. and reconvened at 1:35 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
239
Thursday, November 15, 2012
ANNUAL BOARD MEETING WITH COUNTY ASSESSORS
Mr. Horton opened the annual meeting of the Board and county assessors
required under section 15607 of the Government Code to discuss administrative issues related to
assessment and taxation laws and to promote uniformity in tax procedural matters throughout the
State of California. Mr. Horton provided a brief history, and welcomed the county assessors to the
meeting on behalf of the Board. Mr. Horton introduced Honorable James B. Rooney, President
Elect, California Assessors' Association (CAA) and Amador County Assessor; Honorable Larry
W. Ward, Vice President Elect, (CAA) and Riverside County Assessor/Recorder/Clerk; and,
BOE’s newly appointed Executive Director Cynthia Bridges.
Greetings and Introductory Remarks by each Board Member
Mr. Runner expressed his thanks and appreciation for the challenging role the
county assessors are in and that he seeks to be of help where possible.
Ms. Steel congratulated Mr. Rooney and Mr. Ward on their new roles as
President and Vice President of the CAA, respectively. Ms. Steel commented briefly on the fire
prevention fee and the split roll issue, then thanked all the county assessors for their hard work
and acknowledged those in her district.
Ms. Yee welcomed the county assessors and thanked them for their deep degree
of professionalism. Ms. Yee extended particular thanks to Honorable John Tuteur, Napa County
Assessor/Recorder/Clerk, for proactively disseminating correct information about the fire
prevention fee as issues have been raised. Ms. Yee extended well wishes to retired Marin County
Assessor Joan Thayer and San Luis Obispo County Assessor Tom Bordonaro for their speedy
recoveries.
Ms. Mandel welcomed the county assessors on behalf of State Controller John
Chiang and herself, and stated that she looks forward to meeting those county assessors that she
has not met.
Opening Remarks by California Assessors' Association
Honorable James B. Rooney, President Elect, California Assessors' Association,
and Amador County Assessor, made complementary remarks regarding BOE staff and discussed:
county workload associated with supplemental bills and refunds; increase in Proposition 8
properties in the coming year; the fire prevention fee, including prompt resolution to a problem
that arose; classification of pilot agreements and uniform application of the Welfare Exemption
Law; and, the Assessment Practices Survey Program. Mr. Rooney suggested that county assessors
be informed in advance when their information will be used in future programs, to help them
prepare for inquiries and any issues that may arise.
240
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, November 15, 2012
Honorable Larry W. Ward, Vice President Elect, (CAA) and Riverside County
Assessor/Recorder/Clerk, discussed temporarily reduced property values based on Proposition 8
and educating property owners as those values rebound. With regard to the coming year,
Mr. Ward noted that while the issue of embedded software will have implications for all counties,
these are some examples of issues that affect only some: solar and wind energy producing
properties; and, assessment of possessory interests on tribal lands. Mr. Ward discussed the issue
of funding county assessors and hopes that the BOE will support the counties on this issue so they
can revisit some of the successful programs that were available to county assessors in the past.
Mr. Horton stated that he would be supportive of a joint conference to enable
county assessors to collaborate earlier with the BOE and to participate in the deliberation of
legislation to ensure adequate funding for the county assessors.
Embedded Software Update
Mr. Runner introduced Mike Harris, Principal Property Appraiser, County
Assessed Properties Division, Property and Special Taxes Department, who provided an update
on staff’s efforts regarding embedded software since the discussion at last year's meeting between
the Board and counties, and outlined efforts going forward (Exhibit 11.12).
Speaker:
Therese Twomey, Fiscal Policy Director, California Taxpayers’ Association
Panel Discussion on Funding for Property Tax Administration
Mr. Runner made opening remarks regarding funding for property tax
administration and introduced the panelists listed below (Exhibit 11.13).
Panelists:
Honorable Lawrence E. Stone, Santa Clara County Assessor
Honorable Joseph E. Holland, Santa Barbara County Assessor/Recorder/Clerk,
and Registrar of Voters (Exhibit 11.14)
Honorable David E. Cogdill, Sr., Stanislaus County Assessor
Ms. Yee discussed a proposal for new legislation for property tax administration
assistance from the State (Exhibit 11.15).
The Board adjourned at 3:09 p.m.
The foregoing minutes are adopted by the Board on June 11, 2013.
Note: The following matters were removed from the calendar prior to the meeting: Executive
Director’s Report: Maximizing Efficiency and Effectiveness; Administration Deputy Director’s
Report: Budget Update; and, Customer Services and Administrative Efficiency Committee.
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