Reed Smith Client Alerts

The California Office of Tax Appeals (the “OTA”), the new tax tribunal that will be assuming some of the functions of the California State Board of Equalization (“BOE”), has issued its initial set of draft regulations. The draft regulations contain some short deadlines and procedural traps for those who are not closely familiar with them. They also raise concerns for taxpayers regarding hearing and discovery rules, facilitation of settlement discussions, and taxpayer’s ability to rely on BOE opinions.

Office of Tax Appeals Draft Emergency Regulations

As we previously covered in a prior alert, as part of Governor Jerry Brown’s budget bill, A.B. 102 stripped the BOE of most of its tax administrative functions as of July 1, 2018, and of its role as a tax tribunal starting January 1, 2018. The bill did the following:

  • Created a new agency, the California Department of Tax and Fee Administration (“CDTFA”), which has assumed the BOE’s administrative and regulatory functions for sales tax and other business taxes and fees;
  • Created the OTA, which will assume the BOE’s adjudicative functions on January 1, 2018. The OTA will be composed of administrative law judges (“ALJs”) hearing tax appeals in three-judge panels. These ALJs will be attorneys with experience in tax law; and
  • Left responsibility for overseeing certain property tax assessments, utility tax assessments, and tax assessments on insurers in the BOE.