Sales and use tax: administration: settlements.
If enacted, AB 2366 will streamline the procedures for handling tax-related disputes in California. Advocates of the bill argue that a quicker resolution process could significantly benefit both the state and taxpayers by reducing prolonged uncertainty surrounding tax liabilities. The bill also secures the legislative intent that the department, its staff, and the Attorney General pursue these settlements in a manner that reflects a reasonable evaluation of the risks and benefits involved in litigation, thus potentially leading to better resource management for the state.
Assembly Bill 2366, introduced by Assembly Member Ta, aims to amend Section 7093.5 of the Revenue and Taxation Code, which pertains to the administration of sales and use tax settlements. Currently, the law allows the California Department of Tax and Fee Administration to reach settlements regarding tax disputes while stipulating a 45-day timeline for the approval or disapproval of these settlements by the department's director. This bill proposes to reduce this timeframe from 45 days to 30 days, thereby expediting the settlement process. The intent behind this change is to allow for quicker resolutions in cases where civil tax disputes arise, which may involve protests, appeals, or refund claims.
While the bill seems straightforward, there may be concerns regarding its implications for due process and taxpayer rights, as the reduced time for settlement approval could limit thorough evaluations of cases. Some stakeholders may argue that the expedited timeline could lead to rushed decisions that do not fully consider the nuances of individual cases, possibly resulting in unfavorable outcomes for certain taxpayers. Furthermore, the bill incorporates a provision for future adjustments in settlement thresholds based on the California Consumer Price Index, which indicates a recognition of inflation impacts on tax matters.