Weekly Round-Up: California - The Perfect Storm for Tax Reform?


California has had a flurry of recent activity, leaving taxpayers unsure of what lies next.

Recent developments in the state include Proposition 30 (raising income and sales tax rates), Proposition 39 (single-sales factor apportionment), A.B. 2323 (requiring written rulings), Cutler and Franchise Tax Board action on the unconstitutional qualified small business stock exclusion and deferral statutes, the Gillette decision and S.B. 1015 (withdrawal from Multistate Tax Commission Compact), rulings on throwback and "doing business," as well as the Microsoft ruling.

Additionally, in the wake of the November election in which voters enacted major ballot initiatives, California is now firmly in the control of the Democratic Party. The Democrats enjoy a super-majority in both houses of the legislature and Gov. Jerry Brown (D) is at the helm of the executive branch.

Will single-party control trigger significant tax reform in the Golden State now that a two-thirds legislative vote to increase taxes can be easily met? Whether legislative changes constitute "tax reform" or an unwelcome shift in tax burdens can vary depending on the taxpayer. But one thing appears relatively certain: taxpayers can expect a certain degree of volatility when it comes to navigating California's already complex tax regime.

In an effort to help taxpayers navigate these developments, BBNA will offer a webinar from 12:30 to 2 p.m. ET on March 26 featuring prominent state tax experts Annette Nellen, Professor at San Jose State University, and Oksana Jaffe, Chief Consultant to the California Assembly Committee on Revenue and Taxation.  The webinar will, among other things, provide:

• a review of the tax legislative process, including the relevance of Proposition 26 and the two-thirds Democratic majority;

• a discussion of the questions that Proposition 26 raises for the validity of some California laws; and

• a survey of the areas of California tax law ripe for change.

Register quickly and easily online to secure your space now. Or, please call 1-800-372-1033 option 6, then option 1, and refer to the date and title of the webinar. Lines are open Monday through Friday from 8:30 a.m. to 7:00 p.m. ET, excluding most federal holidays.

In other developments…

Revenue Roller Coaster Isn't Over for States , by Pamela M. Prah, Staff Writer for Stateline, the daily news service of the Pew Charitable Trusts.

After Supreme Court ruling, will Olympia increase taxes? , according to the Seattle Times.

Administrative Law Judge Affirms Holding on Alabama SRLY Rule , according to a new alert by Bradley Arant Boult Cummings LLP.

Marketplace Fairness Act Introduced: Expands State Internet Sales Tax Authority with Some Simplifications , by the Tax Foundation.

Compiled by Priya D. Nair
Follow us on Twitter at: @SALTax
Join BNA's State Tax Group on LinkedIn here.