State Board of Equalization (California)

The State Board of Equalization (BOE) is a public agency charged with tax administration and fee collection in the state of California in the United States. The authorities of the Board fall into four broad areas: sales and use taxes, property taxes, special taxes, and acting as an appellate body for franchise and income tax appeals (which are collected by the Franchise Tax Board).[1] The BOE is the only publicly elected tax commission in the United States.[2] The board is made up of four directly elected members, each representing a district for four-year terms, along with the State Controller, who is elected on a statewide basis, serving as the fifth member. In June 2017, Governor Jerry Brown signed legislation stripping the Board of many of its powers, returning the agency to its original core responsibilities (originating in the State Constitution in 1879).

History

The State Board of Equalization was created in 1879 by the ratification of the second Constitution of California. Its original mandate was to ensure that property tax assessments were uniform and equal across all counties in the state.[1]

Prior to the creation of the state income tax, sales tax, and fuel taxes in the 1930s, California's state government was almost completely supported by property taxes, which were and still are assessed at the county level by elected tax assessors. Assessors were tempted to boost their popularity with county voters by undervaluing voters' property (and thereby lowering their taxes). This presented the risk of counties with honest assessors paying more than their fair share of the burden of operating the state government, so the Board of Equalization was created to equalize the burden.

The California Franchise Tax Board and the Employment Development Department are separately also responsible for collecting taxes.[3] Some have criticized this as inefficient.[4] Efforts to reform the Board were made in the 1940s, 1950s, 1960s, 1990s, and 2000s.[3]

In 1994, Governor Pete Wilson vetoed a plan by the legislature to abolish the Franchise Tax Board and give its responsibilities to the Board of Equalization, explaining in his veto message that the state should have done the opposite. In 2004, Governor Arnold Schwarzenegger released a 2,500-page report seeking to merge the Board with other agencies and then promoted a bill by Assemblywoman Lois Wolk to do just that. The effort failed.[3] In 2008, the agency employed approximately 3,950 people throughout the state.[5]

By 2017, the Board had expanded to collecting $60 billion a year. It collected sales and use taxes, hazardous waste fees, jet fuel taxes, marijuana taxes, and over 30 additional taxes. That year, the Board had 4,700 employees and a $617 million annual budget. Board members are paid a $137,000 annual salary and are each allowed to hire a 12-member staff. Each year, the Board spends at least $3 million on education events where elected members appear before their constituents.[3]

In March 2017, an audit by the California Department of Finance revealed missing funds and signs of nepotism, leading to calls for the governor to put the Board under a public trustee.[6][7] In June 2017, the California Department of Justice began a criminal investigation into the members of the Board.[8]

On June 27, 2017, Governor Jerry Brown signed into law legislation stripping the Board of many of its powers. The legislation created two new departments controlled by the governor responsible for the Board’s statutory duties, the California Department of Tax and Fee Administration and the California Office of Tax Appeals.[9]

The Board still has its constitutional powers to review property tax assessments, insurer tax assessment, alcohol excise tax, and pipeline taxes.[10] The Board will retain 400 employees, with the rest of its 4,800 workers being shifted to the new departments.[9]

Equalization districts
District map (effective January 1, 2015 until January 1, 2023)
  First District  Second District
  Third District  Fourth District

For the purposes of tax administration, the BOE divides the state into four Equalization districts, each with its own elected board member.[11] District boundaries are redrawn following the decennial census. The latest boundaries were drawn following the 2010 census and have been in effect since January 1, 2015.[12]

First district

The first Equalization District is made up of the following counties: Alpine, Amador, Butte, Calaveras, El Dorado, Fresno, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Stanislaus, Sutter, Tulare, Tuolumne, Yuba, a portion of Los Angeles, and a portion of San Bernardino. From 2003 until 2015 most of this area was the second district.

Second district

The second Equalization District is made up of the following counties: Alameda, Colusa, Contra Costa, Del Norte, Glenn, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Tehama, Trinity, and Yolo. From 2003 until 2015 most of this area was the first district.

Third district

The third Equalization District is made up of Ventura County and a portion of Los Angeles County, including the cities of Agoura Hills, Alhambra, Arcadia, Artesia, Avalon, Baldwin Park, Bell, Bell Gardens, Bellflower, Beverly Hills, Burbank, Calabasas, Carson, Cerritos, City of Industry, Commerce, Compton, Covina, Cudahy, Culver City, Diamond Bar, Downey, El Monte, El Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens, Hawthorne, Hermosa Beach, Hidden Hills, Huntington Park, Inglewood, La Cañada Flintridge, La Habra Heights, La Mirada, La Puente, Lakewood, Lawndale, Lomita, Long Beach, Los Angeles, Lynwood, Malibu, Manhattan Beach, Maywood, Monrovia, Montebello, Monterey Park, Norwalk, Paramount, Pasadena, Pico Rivera, Redondo Beach, Rosemead, San Gabriel, San Marino, Santa Fe Springs, Santa Monica, Sierra Madre, Signal Hill, South El Monte, South Gate, South Pasadena, Temple City, Torrance, Vernon, Walnut, West Covina, West Hollywood, Westlake Village, and Whittier. From 2003 until 2015 most of this area was the fourth district.

Fourth district

The fourth Equalization District is made up of the following counties: Imperial, Orange, Riverside, San Diego, and a portion of San Bernardino. From 2003 until 2015 most of this area was the third district.

Members of the Board of Equalization

Current members

The terms of all four regular board members began on January 7, 2019, with ex-officio board member, State Controller Betty Yee, having started her term in 2015.

List of members
Year1st District2nd District3rd District4th DistrictState Controller
(ex officio)
1879 James L. King Moses M. Drew Warren Dutton Tyler D. Heiskel Daniel M. Kenfield
1880
1881
1882
1883 Charles Gildea L. C. Morehouse C. E. Wilcoxon John Markley John P. Dunn
1884
1885
1886
1887 Gordon E. Sloss John T. Gaffey
1888
1889
1890
1891 J. S. Swan Richard H. Beamer James R. Hebbron Edward P. Colgan
1892
1893
1894
1895 A. Chesebrough George L. Arnold
1896
1897
1898
1899 J. G. Edwards Alexander Brown Thomas O. Toland
1900
1901
1902
1903 William H. Alford Frank Mattison
1904
1905
1906 A. B. Nye
1907 Joseph H. Scott Richard E. Collins Jeff McElvaine
1908
1909
1910
1911 Edward M. Rolkin John Mitchell
1912
1913 John S. Chambers
1914
1915 John C. Corbett
1916
1917
1918
1919 Phillip D. Wilson
1920
1921 Ray L. Riley
1922
1923 Harvey G. Cattell
1924
1925
1926
1927 John C. Corbett Fred E. Stewart
1928
1929
1930
1931
1932
1933
1934
1935 Orfa Jean Shontz
1936
1937 Harry B. Riley
1938
1939 George R. Reilly Eric Mont
1940
1941
1942
1943 James H. Quinn
1944
1945
1946 Thomas Kuchel
1947 Jerrold L. Seawell
1948
1949
1950
1951
1952
1953 Robert C. Kirkwood
1954 Paul R. Leake
1955 Robert E. McDavid
1956
1957
1958
1959 John W. Lynch Richard Nevins Alan Cranston
1960
1961
1962
1963
1964
1965
1966
1967 Houston I. Flournoy
1968
1969
1970
1971 William M. Bennett
1972
1973
1974
1975 Kenneth Cory
1976 Iris G. Sankey
1977
1978
1979 Ernest J. Dronenburg Jr.
1980
1981
1982
1983 Conway H. Collis
1984
1985
1986
1987 William M. Bennett Conway H. Collis Ernest J. Dronenburg, Jr. Paul B. Carpenter Gray Davis
1988
1989
1990
1991 Brad Sherman Matt Fong
1992
1993
1994
1995 Johan Klehs Dean Andal Brad Sherman Kathleen Connell
1996
1997 John Chiang
1998
1999 Claude Parrish
2000
2001
2002
2003 Carole Migden Bill Leonard Steve Westly
2004
2005 Betty Yee
2006
2007 Michelle Steel Judy Chu John Chiang
2008
2009
2010 Barbara Alby / Sean Wallentine Steve Shea / Jerome Horton
2011 George Runner Jerome Horton
2012
2013
2014
2015 George Runner Fiona Ma Jerome Horton Diane Harkey Betty Yee
2016
2017
2018
2019 Ted Gaines Malia Cohen Tony Vazquez Mike Schaefer
2020

Tax and fee programs

The State Board of Equalization administers the following tax and fee programs:[13][14]

Sales and Use Tax Programs

For more information on sales and use taxes in California, see the "California" section of Sales taxes in the United States.

  • Sales and Use Tax
  • Bradley-Burns Uniform Local Sales and Use Tax
  • District Transactions (Sales) and Use Tax

Special Tax and Fee Programs
  • Electronic Waste Recycling Fee
  • Environmental Fees
    • Hazardous Substances Tax
    • Marine Invasive Species Fee (formerly Ballast Water Management Fee)
    • Occupational Lead Poisoning Prevention Fee
  • Excise Taxes
    • Alcoholic Beverages Tax
    • Alternative Cigarette Tax Stamp Program (ACTS)
    • California Tire Fee
    • Cigarette and Tobacco Products Tax
    • Cigarette and Tobacco Products Licensing Program
    • Emergency Telephone Users Surcharge
    • Energy Resources Surcharge
    • Insurance Tax
    • Integrated Waste Management Fee
    • Natural Gas Surcharge
  • Fuel Taxes
    • Aircraft Jet Fuel Tax
    • Childhood Lead Poisoning Prevention Fee
    • Diesel Fuel Tax
    • International Fuel Tax Agreement (IFTA)
    • Interstate User Diesel Fuel Tax
    • Motor Vehicle Fuel Tax
    • Oil Spill Response, Prevention, and Administration Fees
    • Underground Storage Tank Maintenance Fee
    • Use Fuel Tax

Property Tax Programs
  • County Assessed Properties Division
  • Private Railroad Car Tax
  • State-Assessed Property Program
  • Timber Yield Tax

Tax Appellate Programs
  • Bank and Corporation Tax Law
  • Personal Income Tax
  • Homeowner and Renter Property Tax Assistance Law
  • Publicly Owned Property Assessment Review Program
  • Taxpayers' Bill of Rights Law

See also

References
  1. State Board of Equalization, About BOE
  2. State Board of Equalization, Board Members
  3. Ashton, Adam (23 April 2017). "For 90 years, Californians have tried to kill this tax board. This is why they failed". The Sacramento Bee. Retrieved 25 April 2017.
  4. Daniel L. Simmons, California Tax Collection: Time for Reform, 48 Santa Clara L. Rev. 279 (2008).
  5. State Board of Equalization, 2007-2008 Annual Report, Profile, "Governance" p. 3.
  6. Ashton, Adam (24 March 2017). "Audit: California tax collectors on 'parking lot duty' for promotional events as politicos push boundaries". The Sacramento Bee. Retrieved 25 April 2017.
  7. Ashton, Adam (31 March 2017). "Here's the audit shaking up the Board of Equalization". The Sacramento Bee. Retrieved 25 April 2017.
  8. Ashton, Adam (20 June 2017). "Criminal investigation targets California tax board leaders". The Sacramento Bee. Retrieved 18 July 2017.
  9. McGreevy, Patrick (27 June 2017). "In massive shakeup, Gov. Jerry Brown breaks up California's scandal-plagued tax collection agency". Los Angeles Times. Retrieved 18 July 2017.
  10. "California – Bill shifts nearly all tax administration and appeal functions from the BOE to two new tax organizations". PricewaterhouseCoopers. June 2017. Retrieved 18 July 2017.
  12. Equalization, California State Board of. "BOE District Boundaries Effective January 5, 2015 - California State Board of Equalization". www.boe.ca.gov.
  13. State Board of Equalization, 2007-2008 Annual Report, Profile, "Tax and Fee Programs, 2007-2008" pp. 2.
  14. State Board of Equalization. "Special Taxes". Retrieved May 21, 2006.
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