California Tax Board Member Trims Role in Spotlighted Program

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Laura Mahoney

California State Board of Equalization member Jerome Horton (D) said far fewer charitable contributions made at his request in 2016 were used for a low-income tax preparation program than he originally reported, according to amended state disclosure forms he filed March 3.

He filed his amended disclosure forms with the Fair Political Practices Commission three weeks before budget auditors for Gov. Jerry Brown’s (D) Department of Finance issued a scathing report questioning the SBOE’s participation in the Voluntary Income Tax Assistance Program for which he was earmarking the contributions.

His filings also came five weeks after the five-member elected board voted to restrict board member and tax agency staff participation in VITA because it isn’t tied to the sales and use tax agency’s core mission (see related story, this issue).

Horton’s chief of staff, Kari Hammond, told Bloomberg BNA April 19 the that he filed the amendments because the original forms were filed in error and the funds weren't meant for VITA. She also pointed out that Horton is sponsoring a bill ( A.B. 795) that would require the FTB, SBOE and Employment Development Department to jointly develop taxpayer tutorials and education for filing their income, sales and payroll taxes.

Mission Is Sales Tax

The SBOE administers sales and use taxes, but VITA helps people earning less than $54,000 file their federal and state income tax returns so they can claim the earned income tax credit

Horton reported $114,518 in monetary or in-kind contributions made at his request—called behested payments—in his original 2016 FPPC filings. Under state law, elected officials can direct donations to other organizations to be used for a charitable, governmental or legislative purpose as long as they disclose them within 30 days.

Of the total behested payments reported for 2016, Horton originally said $76,000 in monetary payments and $27,000 in in-kind donations were used at least in part for VITA.

$60,000 Less for VITA

In his amended disclosures filed March 3, Horton said $60,000 of the $76,000 wasn’t used for VITA in 2016, but was used solely for a large annual conference he sponsors called Connecting Women to Power. The 2016 conference was held June 16.

Of the remaining $16,000 for VITA, $6,000 came from California Educational Solutions, a nonprofit organization founded by Horton’s wife, Yvonne Horton. CES paid the amount April 7 to a member of Horton’s personal staff, Alfred Konuwa, for food and beverages he provided to volunteers working at VITA events.

Herbalife donated $5,000 on July 1 to CES, and Horton’s disclosures said the money was used for VITA and the women’s conference. The U.S. Postal Service gave $5,000 to CES July 19, 2016 for VITA. Horton’s disclosures don’t specify the VITA activities for which the money was used.

Bloomberg BNA has previously examined Horton’s practice of funneling behested payments that are primarily from entities with business before the board going primarily to or through CES. Between 2009 and 2016, he has reported $846,353 such contributions.

To contact the reporter on this story: Laura Mahoney in Sacramento, Calif. at LMahoney@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Text of the March 3 amended disclosure forms is at http://src.bna.com/n4X.

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