Guest Column: A Good Year For Tapayers

By George Runner

(Victor VAlley)–As your elected member of the California State Board of Equalization, I am fighting to ensure your voice is heard in Sacramento. As always, I welcome your ideas about how we can work together to solve the pressing problems facing our state.

2011: A Good Year for Taxpayers

How about some good news to close out this year?

If you’re a Californian, your taxes are lower today than they were a year ago. That’s a good thing for you, your community and our state economy.

You may recall that earlier this year many politicians claimed catastrophe would strike if legislators rejected a five year extension of a multi-billion dollar hike in income taxes, sales taxes and car taxes.

Thankfully, Republican legislators held firm. And, believe it or not, the sky did not fall. In fact, if you look closely at the latest numbers from the Department of Finance, you’ll find that billions in unanticipated revenue has materialized this year without any tax hike at all.

Furthermore, according to the latest Board of Equalization numbers, taxable sales are up 8% throughout our state. Sales tax revenue has exceeded budget revenue estimates by more than $100 million so far this fiscal year.

You see, a recovering economy is far more effective at generating revenues than any tax hike. When Californians have jobs, state coffers always have plenty of revenue.

Of course, we still have a lot of work to do. As we enter the new year, jobs continue to be the key to solving California’s most pressing problems. As your elected representative, I’ll continue to work on your behalf for jobs and a brighter future for our state.

Tax Victories You May Have Missed

Not every tax victory makes the front page of the newspaper. Here are a few victories you may have missed this year:

  1. Ag Exemption for Solar: In a victory for farmers, the partial sales and use tax exemption for farm equipment can be applied to purchases of solar equipment if the taxpayer can “demonstrate that the solar facility is specifically designed to provide power to qualifying machinery.”
  2. Collection Cost Recovery Fee: In a victory for struggling business owners, a proposed 20% increase in BOE’s collection cost recovery fee has been shelved for now. The fee will remain fixed in 2012 to allow time for staff to study the issue more thoroughly. Learn more.
  3. Deals of the Day: In a victory for consumers, coupons purchased at deal-of-the-day websites, like Groupon and LivingSocial, will be taxed at the amount the consumer actually spends (e.g. $50) rather than the value of the item purchased (e.g. $100). Learn more.
  4. Qualified Purchasers: In a victory for small businesses, the Board suspended “courtesy registrations” and is allowing businesses who never signed up for this controversial use tax collection program to leave if they no longer meet the criteria to be in the program.
  5. Welfare Exemption: In a victory for non-profits, the Board has clarified that charitable organizations should receive a property tax exemption if the “charitable activities performed by the nonprofit organization confer some ‘meaningful,’ ‘important,” or ‘significant’ benefit to people in California.” This means even California-based non-profits with an international focus may be eligible for this property tax exemption. Learn more.

Should you desire further information on any of these issues, please do not hesitate to contactmy office for assistance.

Tax Tip of the Month

Q. Are California small businesses and non-profits eligible for the new federal healthcare tax credit?

A. Yes. More than 630,000 California employers with less than 25 full-time employees may be eligible for the Small Business Health Care Tax Credit. Eligible recipients include small businesses and non-profits that pay at least 50% of their employees’ healthcare premiums.

To learn more about this tax credit, log on to IRS.gov

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