Posted by BOE Member George Runner at 2:39 pm on Apr 07, 2014 Comments Off on California Returning Millions to Business Owners
This spring thousands of business owners throughout California
are receiving a welcome surprise in their mailbox. Rather than a
notice of a new tax, fee or audit, they’re getting a check from the
State Board of Equalization.
No, we’re not talking about annual income tax refunds from the
Franchise Tax Board. These checks are marked “SECURITY REFUND” and
represent a dramatic shift in how California’s elected tax board
welcomes new businesses to our state.
Previously new corporations and LLCs were forced by the BOE to
turn over anywhere from $2000 to $50,000 of their own money as
security before they could make a single legal taxable sale. This
“security” was held just in case a business might default on its
taxes during its first three years of operation.
It was a uniquely California-style shake down. Rather than
encourage new business start-ups, the government robbed them of the
capital they needed to be successful, only to sit on it for three
years before returning it.
I took a close look at the program and found it didn’t make
sense for taxpayers or the state. Security was rarely applied, and
staff time and energy were needlessly… Read More