The Tax Appeals System in California

although fairness and objectivity in their activities are promoted by the ~gency, the hearing officers are inherently susceptible to at least three influences which tend to militate against them being objective: a) they are employed by the tax-administering authority and so may be subject to its bias, b} they belong to the same organization as, and may personally know, those who administer the tax and so may be affected by a sense of organizational or personal loyalty, c) they are generally drawn from among the ranks of B of E auditors and lawyers and so may be predisposed to view the auditor's position and arguments sympathetically. 5) Because the Board of Equalization is not perceived as an impartial appellate body, some determinations are not appealed on the belief that appeal would be a fruitless pursuit~ This is especially true of tax determinations which are ~ubstantially passed through to consumers. Consequently, consumers may be paying improperly levied taxes. This situation is most likely to occur in two areas, utility assessments and sales tax determinations. Property tax payments are generally considered by the Public Utilities Commission (pUC)--which regulates the rates which public utilities may charge their customers--to be a legitimate and unavoidable cost of business for utilities. Therefore, the PUC usually grants utility company reque~~s for rate increases necessary to pay property tax liabilities. As a result, utilities generally have little incentive to pursue vigcrously appeals of property valuations made by B of E, especially when the Board is perceived to be biased in Its outlook. To the extent that a B of E valuation would be judged incorrect by some independent appellate body, utility company consumers are paying an incorrect amount of tax. Similarly, retailers are authorized by law to directly pass on to their customers the sales taxes which retailers are required to pay on their taxable sales. Therefore, a retailer who bel ieves a commodity he/she sells is being improperly subjected to sales taxation may not be inclined to exert much effort to challenge that application of the sales tax. This disinclination may be overcome to some extent if the retailer is placed in a less profitable position by the fact that competing commodities are not subject to the sales tax and so are less costly to purchase. However, when determining whether pursuing appeal would be worthwhile, the retailer must weigh the effort and cost of appeal against the extent of the loss resulting from the competitive disadvantage. The relative perceived costs of pursuing appeal will tend to increase when appeal to the Board of Equalization is perceived as a largely futile effort to convince a biased body. Hence, a perceived bias in the Board could discourage an appeal which correctly argues that consumers are being improperly taxed. 6) The overlapping membership of FTB and B of E impairs the objectivity of B of E's adjudication of FTB appeals cases. As member~ of the body which establishes pol icies regarding the administration of personal and corporate income taxes, the Chairman of the Board of Equalization and the Controller are inherently prone to view from a biased perspec- tive appeals which challenge those policies. -19- removal of tax-administering functions from the Board of Equal izatton could be an important first step toward centralizing State revenue adminlstra- tion--a move which the Commission still believes to be a highly desirable economy measure. Some of B of E's major tax-related functions (most notably intercounty equalization and utilities assessment) are constitutionally assigned and their transfer to another agency would require passage of a constitutional amendment. However, a great many of the appeals presently heard by the Board stem from taxes administered by the Board under the prescription of statute. Responsibi lity for the administration of these taxes could readily be transferred to another agency, thus substantially reducing the administrator-adjudicator conflict now inherent in the Board's dual role. Two of the current criticisms of the Board as an appellate body would not necessarily be remedied under this option: a) Unless a department of revenue were created and the Franchise Tax Board abolished, two FTB members would still be 'sitting as B of E members; b) There would still be no requirement for expertise among the B of E members themselves. C. Create a new administrative entity to hear tax appeals. Such a new entity could assume any of a variety of forms. Presumably, however, It would be designed as some sort of plural body (board, commission, tribunal, etc.) so as to avoid a concentration of adjudicatory power under a single agency head and thus the creation of an appellate czar. The members of this body could be required to possess relevant expertise and could prob- ably best be insulated from political influences if they were appointed by the Governor for fixed overlapping terms with confirmation by the Senate. These members could either hear appeals directly or act as a review board over decisions rendered by administrative law judges or hearing officers. Being a new entity unbounded by precedent, it could tailor Its procedures to meet the needs of providing equitable tax hearings in an economical fashion. Whatever the structure of a new administrative appellate entity, it would by definition be a part of the executive branch of government and so could suffer some lack of credibility among taxpayers as a completely impartial appellate authority. However, if properly detached organizationally and politically from other segments of the executive, it seems probable that the public'would view the entity as independent. D. Institute a tax court. Many of those who testified before the Commission and voiced disfavor with present appellate structures indicated a preference for the replacement of those structures with a tax court. Such a court would be equal in stature to Superior Court, but would be of limited, specialized jurisdiction and would be manned by judges with exper- tise in tax matters. The major advantages of a tax court over any administrative appellate body would be a greater sense of finality of its decisioMs with respect to questions of law, and a greater likelihood of taxpayer confidence in the detachment and fairness of appeal del iberations. Even though It may be vested with the authority to adjudicate points of law as well as fact, an administrative body's rulings on purely legal matters may tend to be viewed -24- by taxpayers (and their attorneys) as somewhat less definitive than a ruling by an arm of the judiciary. Although it cannot be said with certainty, it is suspected that a tax court ruling would be less likely to be appealed to a higher court than would an administrative body's ruling. By placing tax appeals within the purview of the Judiciary, it is also expected that taxpayers would be more apt to feel their grievances would receive a full measure of due process. Testimony received by the Commission suggested that a disadvantage to establishment of a tax court would be its relatively high cost. However, there Is no evidence indicatIng that in fact this option would be unac- ceptably expensive to institute. The Judicial Council--which is responsible for general administration of the State's court system--has traditionally opposed the creation of specialized courts (tax courts, divorce courts, etc.). This opposition has been based largely upon the arguments that specialization reduces administrative flexibility by limiting the transferability of judicial resources (i.e., judges and legal support staff), and that it tends to lead to jurisdictional conflicts. Which Taxes? It may not be prud~'t or feasible to place all tax disputes under the jurisdiction of a single appellate structure. Since the design of any new appellate stru~ture can be sIgnIfIcantly influenced by the nature and volume of cases which it must handle, some consideration should be given to the question of which taxes would be adjudicated under the structure. (An overview of pertinent tax characteristics is provided on page 40.) In regard to this question, three points in particular bear attention: -25- OVERVIEW OF TAX CHARACTERISTICS ADMINISTERED APPEALED APPEALS VOLUME TAXES BY TO 1977-78 SPECIAL COMMENTS Business Sal es & Use B of E B of E Alcoholic beverage B of E B of E Total Administrative function Business assigned by Constitution Ci garette B of E B of E Taxes: 163 Fuel B of E B of E (heard by the Board itself; El ectri cal energy B of E B of E prel iminary hearings not Insurance B of E & B of E incl uded) Administrative function Insurance assigned by Constitution Comm; ssi oner Pers ona 1 Income FTB B of E Total FTB: 553 (400 of these Corporate Income FTB B of E dismissed be- fore being Payroll heard) Un emp 1 oymen t Insurance EDD UIAB Total Payroll tax appeals are Payroll: frequently intertwined Disability Insurance EDD UIAB 1010 heard by with unemp1oyment/ ALJ's; 182 heard disability benefit Withholding EDD UIAB by Board* eligibility disputes Inheri tance Controller Super; or Not Available Court Gift Controller Superior Not Available Court State-assessed property Intracounty B of E B of E 1* Appellate function assigned by Constitution ,. Intercounty B of E B of E 56* Administrative function assigned by Constitution Util ities B of E B of E 17* Administrative function assigned by Constitution Private Care B of E B of E 13* Administrative function assigned by Constitution Timber Yield B of E B of E a - Locally-assessed County County Bd. 23,109 Appellate function Property Assessor of assigned by Constitution Equalization . *Calendar Year 1978 aThe administration of this tax has been fully operative only a short time. The first appellate hearing on this tax was in November 1978; it is expected there will be two more by June 1979. -26- 1) The number of locally assessed property tax appeals is so much greater than the number of other tax appeals that their inclusion (or exclusion) under a new appellate structure would substantially affect at least the physical (e.g., number and type of staff, geo- graphical distribution of appellate offices, total costs) and possibly the functional (e.g., hearing procedures, type of adjudicator) characteristics of the structure. 2) Some tax administration and appeals functions are assigned to particular bodies by the State Constitution. Changing the assign- ment of these functions would require a constitutional amendment, an act which is generally considered to be difficult to achieve. Most notably, changing the current local property tax assessment appeals procedures would require a constitutional amendment. 3) No major criticism of the UIAB as an appellate structure was evidenced in this study. It appears essentially independent of the tax-administering agency of which it is a part and its ALJ's have relevant expertise. Also, tax appeals cases heard by UIAB are very often inextricably involved with benefit cases. Separating out its tax appellate functions for transfer to another body may only complicate those cases which involve both benefit and tax questions. Costs. Some have argued t~at considerations for equity and due process should override those of cost in designing a system for deliberating on taxpayer appeals. The Commission agrees that achieving equity is of fundamental and superior importance. However, costs should not be totally ignored, especially when it appears that there may be more than one acceptable alternative available. Any attempt at assessing the relative cost/benefit of the alternatives is dependent upon at least some knowledge of the expenses and savings which can be expected under each alternative. Resource limitations have prevented the Commission from conducting an in- depth cost/savings study of the various alternatives. Nevertheless some data were collected which may assist the effort to gain perspective on basic cost dimensions and identify areas where additional expenditures or savings might accrue. 1) The State Board of Equal ization According to figures suppl ied by the Board of Equalization, if the Board had been relieved of its appellate functions it could have reduced its budget by the following amour.ts for the corresponding fiscal years: Cost Personnel years 1976-77 $478,897 16.6 1977-78 $462,990 14.9 1978-79 $482,551 14.9 (es t i mate) These amounts represent direct costs for Board appel late review. They do not include a) indirect costs which could not be readily deleted from B of E's budget if it were no longer responsible for hearing -27- appeals; b) costs for preliminary business tax hearings; c) the costs of operating the Office of Assessment Appeals (OAA). (In the Commission·s view, preliminary business tax hearings and OAA should properly remain as review operations internal to B of E.) 2) County Property Assessment Appeals The Commission wrote to the twenty-five counties currently operating assessment appeals boards and asked them to identify the savings that would have accrued to them in fiscal year 1977-78 if they had been relieved of their responsibility for hearing property tax assessment appeals. Twenty-one counties responded. These twenty-one accounted for 83% of the local property tax assessment protests filed statewide in 1977-78. Extrapolating the savings reported by these counties on the basis of their proportion of statewide assessment protests, it is estimated that the aggregate savings to all counties would have been $1,883,854 (see Appendix B). (There is reason to believe that this figure somewhat underrepresents the actual savings that would have accrued. Many of the counties reported only their direct ap~eals board costs (i.e., compensation for board members and clerical support staff) and did not include services rendered by the county assessor·s office and county counsel on behalf of the board. The degree to which the aforementioned figure is underrepresentative because of the omission of these costs is undetermined.) 3) The Unemployment Insurance Appeals Board The Unemployment Insurance Appeals Board has calculated that its average 1977-78 cost for· hearing tax appeals was $165 per hearing by the lower authority (administrative law judge level) and $653 per case reviewed by the higher authority (the Board itself). In 1977-78 the lower authority disposed of 1137 cases and the higher authority reviewed 175. On the basis of these figures it is estimated UIAB expended $327,563 on tax appeals cases in 1977-78. However, UIAB would probably not realize savings of this magnitude if reI ieved of its tax appellate duties, because the average cost figure used to infer this total expenditure amount includes overhead and other indirect expenses which could not practically be reduced. The extent to which such irreducible indirect costs are represented in the estimated total expenaiture is unknown. 4) Superior Court An undetermined savings would accrue as a result of reduced Superior Court caseload if the decisions of a newly created appellate body were appealable directly to the District Court of Appeals. In addition, inclusion of gift and inheritance tax matters wnder the jurisdiction of the appellate body would further reduce the caseload of Superior Court. The extent of such a caseload reduction would be dependent upon the scope of the tax matters placed under the jurisdiction of the new appellate body. -28- There is 8 lnck of available information regarding the volume of Superior Court tax cases. There are also no figures readily avail- able regarding typical or average per case costs for adjudicating such matters in Superior Court. (This information could certainly be developed with sufficient investigation and analysis, but that level of undertaking was not within the resources of this study effort. ) The costs of setting up and operating a new appellate system can be deter- mined only after pol icy decisions have been made regarding the structural and functional 'framework of the new system. Decisions regarding such matters as the taxes to be included within the system's pruview and the type of adjudicator to be employed will affect cost determinants such as caseload and compensation levels. However, from the information above, at least one cost perspective may be established regarding a new system. If the system were to include appeals of business taxes, personal and corporate income taxes, and State and local property tax assessments, if decisions under the system were appealable to the District Court of Appeals, and if the bodies currently hearing these tax appeals were to be relieved of that function, then expenditures for a new system could run a minimum of $2,346,844 (in 1977-78 dollars) without exceeding present combined State and local appellate costs. This figure is composed of the 1977-78 appellate cost estimates of the State Board of Equal ization and the county boards of equalization/appeals. The figure is definitely cons~rvative since it does not include 1) some amount of county assessor and county counsel costs (see above) or 2) Superior Court costs. Other States. The Commission conducted a limited review of other states' tax appeals, but this review revealed no pronounced trends or obvious "models" to guide the establishment of a new system in California. Appellate structures and practices among the states vary considerably ranging from states which maintain tax courts possessing full judicial status to states which pro- vide only informal review by the tax-administering agency.~ It is interesting to note, however, that in the last twenty years no less than a dozen states have reevaluated their methods of adjudicating tax appeals and reacted by establishing new appellate systems. Selecting an Alternative Deciding upon the i'best" design for a new system of adjudicating tax appeals is largely a subjective pol icy matter properly assigned to the Legislature for final deliberation and action. Some presently unknown-- and perhaps undeterminable--factors (e.g., the specific costs and taxpayer acceptance of alternative systems) may weigh in that decision. Given these unknowns, the Commission cannot conclusively recommend an alternative that would in fact prove most efficient and effective. Nevertheless, the Commission does offer the following recommendations and suggestions in addition to its aforementioned primary recommendation that a new appel- late system be established incorporating specified characteristics (see page 22). -29- f i I) Whatever new appellatb ~ystcm is established, it should not remove from the Unemployment In~llrance Appeals Board the responsibility for adjudicating the payroll tax appeals the Board now handles. These appeals are so often closely connected with unemployment insurance benefit appeals that their separation from the Board would probably only tend to promote confusion and inefficiency at no obvious gain to justice. 2) An attempt should be made to secure the necessary constitutional amendment permitting property tax assessment appeals to be included within whatever new system is established. Property assessment pro- tests comprise by far the largest number of taxpayer appeals. The State's voters should be afforded an opportunity to decide whether or not the present assessment appeals structure should remain as designated in the State Constitution. 3) Provided that there would be a sufficient volume of tax appeals to justify it, and provided that its costs of operation would not be unduly high, institution of a tax court would appear to be the most effective method for adjudicating tax appeals. Being a part of the judiciary, a tax court would probably be the alternative most likely to provide both the fact and the perception of impartial ity and equity. Without depreciating the general argument against specialized courts, the Commission notes three points in support of a special ized tax court: a) With the volume of cases to be handled by a court system having jurisdiction over local property assessment appeals as well as virtually all major State taxes (payroll taxes excluded), the internal resources of a tax court would probably be suffi- cient to be self-sustaining; i.e., any limitations that might exist with respect to the transferability of resources between a tax court and the rest of the judicial system would probably not create any significant administrative difficulties. b) Tax law generally is complex and intricate. Not uncommonly, the complexity of the statutes is compounded by technical issues regarding proper accounting methodology. While there is no reason to believe that these complexities are beyond the grasp of the average justice, a judge who is unfami I iar with tax issues would likely require more time to study a technically complex case and may be less sensitive to any subtle but legally significant technical nuances of a case than would a colleague with expertise in tax matters. Therefore, for a judicial system handling any significant volume of tax cases, it wou;j seem that establishment of a specialized tax court would contribute to more effective and efficient judicial administration. c) The federal government operates a tax court which appears to function quite effectively without producing any significant administrative problems. -30- The position in favor of a tax court is contingent upon '~ufficient caseload" and "reasonable cost," both of which are inexact and largely subjective qualifiers. Without attempting to specifically defin~ "sufficient caseload," the COfl1flllssion believes that a tax court would be justified from a workload standpoint if it were assigned to handle the property assessment appeals currently adjudicated by county boards of equalization/appeals. However, if a tax court were only to handle appeals of state level taxes--and if the volume of those appeals did not Increase substantially over recent historical levels--its exis- tence as a specialized judicial entity could not be Justified on the basis of appeals volume. With regard to cost, "reasonableness" is a highly comparative term which becomes even less precise 'lihen applied to efforts aimed at attaining such immeasurables as IIjustice" and 'Jpublic confidence. " Determination of the level at which the costs of operating a tax court exceed any benefits to be derived from it is a matter best left to the representative deliberations of the Legislature or the elector- ate di rectly. 4) Should the Legislature determine that the net cost of operating a tax court is unacceptable, or If it proves impossible to include within a tax courtls jurisdiction the adjudication of local property assessments, .. ,len the Commission suggests that the Legislature closely examine the possibility of consolidating appeals of state level taxes under the Une,,'ployment Insurance Appeals Board. Unless further analysis shows the Board's operations to be unsatisfactory, consol i- dation would appear to be a relatively inexpensive way of acceptably achieving the ends sought by the creation of an independent tax appeals entity. Also, should the Legislature find consolidation under UIAB to be a viable option, consideration should be given to further enhancing the Board's independence by making it organizationally separate from the Employment Development Department and any other agency responsible for tax administration. -31- FOOTNOTES 1/ For example, from fiscal 1976-77 through 1978-79 only about 7% of the protested business tax determinations received by the Board of Equalization were appealed to the Board itself after coosultations at the staff level. Similarly, between 1976 and 1978 staff-taxpayer consultations resolved about 94% of the personal and corporate income tax protests filed with the Franchise Tax Board. 2/ California State Board of Equal ization. Annual Report 1976-77, pp. 11-12 3/ In order for a taxpayer to be assured of an oral hearing before the Board, a request for such a hearing must be specifically stated in the petition for.redetermination. If not included in the petition, the Board is not required to grant a request for an oral hearing. 4/ California State Administrative Code. Title 18, Chapter 2, Section 5054 5/ I bi d. 6/ Literally, "de novo" means anew or again. A de novo hearing is one in which the court hears and considers the arguments of the parties involved and rules on the substance of the arguments. A hearing is not de novo when the court strictly limits its review to the record of the foregoing hearing and rules only on whether the adjudicating authority in that hearing acted properfy in issuing its decision. That is, the substance of the arguments is considered and evaluated only to the extent necessary to determine whether or not the ruling authority's decision was reasonable, objective and legally correct. 7/ Cal ifornia State Administrative Code. Title 18, Chapter 2, Section 5024 8/ California Revenue and Taxation Code. Division I, Part 3, Sect ion 18 I 6.2 9/ Domenghini v. San Luis Obisbo County, 40 Cal. App. 3d 689. Hunt-Wesson Foods, Inc. v. Alameda County, 41 Cal. App. 3d 163. Madonna v. San Luis Obisbo County, 39 Cal. App. 3d 57. Quinn v. Aero Services, Inc., 172 F 2d 157. Westlake Farms, Inc. v. Kings County, 39 Cal. App. 3d 179. 10/ Cal ifornia State Constitution, Article XIII, Section 16 11/ Cal ifornia Revenue and Taxation Code. Division 1, Section 1624 121 I bid. Sec t ion 16 I I .5 -32- l1! In conducting this study, the Commission met with the Chairman of the State Board of Equalization, the State Controller, the Executive Officer and the Chief Counsel of the Franchise Tax Board, and the Chief and Senior Administrative Law Judges of the California Unemployment Insurance Appeals Board. The Commission also held a public hearing on February 13, 1979 to receive testi- mony on this issue. Oral or written testimony was submitted to the Commission by the following organizations: Amfac California State Bar Association-Section on Taxation California Chamber of Commerce California Farm Bureau Federation California Judicial Council California Society of Certified Public Accountants California Taxpayers I Association Erns t and Ernst Foremost - McKesson Getty Oi I Office of Administrative Hearings (State Dept. of General Services) Pacific Gas and Electric Company Southern Pacific Railroad 14/ The issues surrounding the State'~ present tax appellate structure are not new. Since 1939 at least 29 bills and constitutional amendments have been introduced in the Legislature for the purpose of creating an independent tax appeals body. In addition, establishment of an alternate appellate system has been recommended in the reports of several studies including two published by the Assembly Interim Committee on Government Organization (liThe Need for a Department of Revenue in California," 1955 and "Cal ifornia's Tax Administration," 1965) and one published by this Commission ("Proposed Organization of Revenue Administration in Cal ifornia," 1964). In spite of these recommendations and proposals, no effort to create an independent tax appeals body has yet been successful. This lack of success appears in large part to be a result of the fact that such efforts were usually tied to a simultaneous and very politically sensitive move to reorganize and consol idate tax administration in the State, a movement which has never been real ized. l2! See footnote I. 16/ For an overview of other states l tax appeals systems, refer to "State Tax Revie'" Agencies: Organizations and Practices," research report No. 79, published in December, 1978 by the Federation of Tax Administrators, 444 North Capitol Street, N.W., Washington, D.C. 20001 -33- APPENDIX A -34- -' I W 111 I MAJOR TAXES AND LICENSE FEES COLLECTED BY THE STATE OF CALIFORNIA MAJOR TAXES AND LICENSE FEES COLLECTED BY THE STATE OF CALIFORNIA TAX ~;~~1 __ ~l~~=-~- ~~I;~~~I~rn;~;_I_~-~~~AATI~~'-~~s~~~~_1 SALES AND USE TAX State Loca 1 Govern- ments Total $5,030,438,159 $1,404,100,724 $6,434,538,883 •• p ... - •••• ~-~-.,.-.---.-.-- •• Gross receipts from all retail trans- actions not specifically exempt by law and involving the sale or use of tangible personal property are sub- ject to a percentage tax. Sellers pay this tax and, under the authority of the law, reimburse themselves by charging the purchaser the amount of the tax. The tax consists of a State portion (4.75%), a city and county portion (1%), a county trans- portation portion (0.25%) and, in some areas, a special transportation district portion (0.25%). R&T: Div. 2, Parts 1. 5, 1.6 The tax is self-assessed and retailers are required to file returns on either a quarterly or a monthly basis in most instances. B of E is responsible for auditing returns and collecting the State and local shares of the tax ex- cept in the case of a vehicle sale between non-dealer parties. For those transactions, DMV collects the tax from the purchaser at the time the vehicle is registered. Local govern- ment portions of the sales and use taxes collected by B of E are appor- tioned back to the local governments based upon the place of transaction. B of E . -..... -.. ---------~.-~.~-------~----~-.- -~--~--- -----... _----- I W 0'1 I TAX PERSONAL INCOME TAX BANK AND CORPORATIONS FRANCHISE INCOME TAX I~. ------------ --- -- ----- ------- --- --- ---._-.-------- --1--'----- --------.--·--··-------------·---·_----·_·-l---- ~~~~~~~l I DESCRIPTION2 AUTHORITY I ADMINISTRATION APPEALS BOO_y3 ----_. '-~'.--"'----- ----.-----.-~ -.. -------------- ----.. -------_._---- .---_.---------." ---------------------------------_._- $4,667,887,272 ~2 ,082 ,207 ,624 Personal income, after adjustment for I R&T: Div.2 authorized exemptions, deductions and Part 10 credits, is subject to taxation. The Persons with filing obligations and tax liabilities are required to self- assess this tax annually and submit returns to FTB. FTB is responsible tax rate varies with the amount of adjusted taxable income and is based upon a generally progressive tax scale ranging from 1% to 11%. For-profit corporations and banks are subject to a 9% tax on their net taxable income with a minimum tax of $200. In addition, banks, savings and loans and other finan- cial institutions are subject to an additional tax of up to 4% of net income in lieu of local property taxes, from which they are exempted by the Constitution. for overall administration of this tax process including collecting re- turns, refunding payments, auditing returns and ensuring compliance with tax laws. A significant feature of this tax is its required regu)ar with- holding of a portion of income during the course of the year. In effect, this is a requirement of current pay- ment on expected year-end tax liabil- ity. Most taxpayers have an amount withheld each year which exceeds their year-end liability and,.upon filing a return, receive a refund from the State for the amount over withheld. Under contract with FTB, EDD is respon- sible for ensuring proper withholding. R&T: DiV.21 FTB is responsible for the administra- Part 11 tion of this tax. Tax liability is self-assessed and is based upon net income for the previous year. FTB audits a selected sampling of returns to ensure compliance and monitor accuracy. B of E • B of E , w " , I,~~~~! ~~~-,~ '"J='~~~~i~~~~'-:-[: :~~:=~~_D~-;~;; ~~~;N~-~',-,~~~=-_:~~I~~~TH;~~_;~J-=:=~~~~~D~~~~~;~ ION--·'--·-=··,-=J. APPEALS BODy3 UNEMPLOYMENT INSURANCE CONTRIBUTION DISABILITY INSURANCE CONTRIBUTION $1,652,053,296 $ 588,972,301 To lessen the economic dislocation of lUI: Div.l, involuntary unemployment, this tax is Part 1 levied to provide d system of income maintenance based upon insurance prin- ciples. Employers pay a percentage tax on the first $6,000 of taxable wages paid to eac~ employee during the year. The basic rate is 2.7%, but the actual rate applied to an individual employer may vary from 0.0% to 3.9% depending upon specified circumstances. Revenues finance benefit payments to eligible unemploy- ed persons. This tax funds a State program deSign-I UI: Div.1. ed to provide limited compensation Part 1 for wages lost as a result of a non- occupational illness or injury. Em- ployees pay this tax at the rate of 1% of the first $11,400 of wages re- ceived for the calendar year. With the major exceptions of government employees and the self-employed. most employees in the State are required to contribute to the Disability In- surance program unless they have opted to participate in a voluntary plan which provides benefits at least com- parable to those under the State pro- gram. Revenue from this tax provides e1i9ible persons with benefit payments of $30-$146 per week depending upon the claimant's wages during a prescrib ed base period. __ • ____ ~ __ .•. _. ___ .... ____ . ___ ._A ___________ ~ __________ • L. ___ _ This is essentially a federal program administered by the State. The tax is self-assessed and employers are required to file quarterly returns with EDD. which is responsible for overall administration of the tax. EDD's responsibilities include audit- ing returns. registering employers and determining benefit payments. Although this tax is paid by the employee. employers are responsible for deducting the proper amount from their employees' wages and reporting and paying these deductions to EDD. EDO is responsible for overall admin- istration of the tax including the auditing of employer reports. the main tenance of employee accounts and the determination of benefit payments. UIAB UIAB , w (» , TAX MOTOR VEHICLE LICENSE FEES Motor vehicle -- -. ---- .---- -----.-----. -- ---.. -.- --.---.-- --·-----·-·-·-·~-·l--·--···--·· ." -----.. --.... --... ----.-... -.-.. ------r------ -!~l~~~f _____ l.-_ ... ____ . _____ DES.~~_~~~_~_. ___________ ~TH?RIT_~J __________ ~!>"'I~!ST~ION _______ I~PEALS BO~~ This is an annual fee charged against each vehicle. It is imposed "in-lieu" of any State or local property taxes and is equal to 2% of the vehicle's "market value" as calculated by DMV. R&T: Div.21 DMV collects this fee as part of the Part 5 vehicle registration process. B of C license fees 1$494,323,312 Trail coach fees 39,831,392 Tota 1 $534,154,704 MOTOR VEHICLE REGISTRATION FEE I $223,830,958 WEIGHT FEES $128,785.984 .' Motor vehicles and trailers are re- quired to be registered annually. An $11 fee is charged at the time of registration. Comnercia1 motor vehicles and trailers are subject to an annual fee determined on the basis of the nunmer of axles and unladen weight of the vehicle. ._._---.-_._-_ .. _.-------- Veh: Div.3 Chapter 6 Veh: Div 3 Chapter 6 This fee is collected by DMV as a condition of vehicle registration. DMV collects this fee as a part of the vehicle registration process. -------~--------------.------- B of C B of C , W <0 , TAX --1----- ~-~-~~Nu~f- -- -,----- --- ------D~~~R; PTJ ;NT---------·-~r:UT~~-~;~~--I--------- ----- -·~~~INIS~~~~~ ------ ---'-f-;~EA~;BO~y3 __ _ -___ .. _____________ J~!.?:_J8 ___ _________________________________ -------------------------------------- --- --.---- ------ ------------- FUEL TAXES Motor Vehicle Fuel License I $785,139,561 Use Fuel Tax I 66,105,33Q Total, Motor Vehicle and Use $851,244,891 There are two categories of fuel taxeslconst: 1) the motor vehicle fuel license tax, Article XIX which is imposed for the privilege of R&T: Div.2 distributing fuel, and 2) the use fuel Parts 2.3 tax. which is imposed for the privi- lege of using fuel. The motor vehicle fuel license tax group consists of a 7¢ per gallon tax on various forms of gasoline (e.g. automobile gas. aviation gas. naphtha, etc.) and a 2¢ per gallon tax on jet fuel. Use fuel taxes include a 7¢ per gallon tax on diesel fuel. a 6¢ per gallon tax on l1quified petroleum gas (LPG) and liquified natural gas (LNG), and a charge of 7¢ per 100 cubic feet of compressed natural gas (CNG). These taxes apply to fuel used to propel a motor vehicle on public roadways. a non-commerical aircraft or a vessel. Taxpayers not using these fuels for these purposes may apply for a refund of taxes paid. Revenues from these taxes are used largely for the con- struction and maintenance of highways and public transit systems. and for services to vehicle owners (e.g. vehicle registration. traffic regu- lation. etc.) These taxes are self-assessed and regular returns must be filed. In the case of the fuel license tax. payments are due from the initial distributor. Use taxes are due from the final vendor who collects them from the user. B of E is re- sponsible for auditing returns and ensuring compliance. The Controller's Office is responsible for collecting deficiency payments and refunding taxes paid by those using fuels for exempted purposes. B of E __ .r ___ -. __ .~ ______ ~. __ -.-_·· ___ ·P _____ • _______ '_ - - - - - - - - - - --...... I -f'> a I TAX -- -- ------- ----- ------- - -- ----- ----- -- --- --- -1----------- --- -- ---- ---- ----.---------------.----- ----------------1----------- ~~~~~~~l I DESCRIPTION2 AUTHORITY I ADMINISTRATION APPEALS BOOy3 .-- - ~-- ._-- .. ~-. _ ... ---- .---.. ------ -- -- --_. --------_._-------.----- --" -.-.. -.---------.--.-.--.. ------------.-----~ CIGARETTE TAX State porUon (7¢ per pack) I $191,853,954 Local portion (3¢ per pack) I 82 ,962 ,212 Total $274,816,166 ALCOHOLIC BEVERAGE CONTROL TAX Distilled spirits $109,088,200 Beer & Wine 22,971,917 Total $132,060,117 A tax of 10¢ per pack is levied on cigarettes sold or consumed in the State. Thirty percent of the reve- nue is disbursed to cities and counties and 70% goes to the State General Fund_ Taxes are levied against all alcoholic beverages manufactured, imported or distributed to retailers in Califor- nia_ The tax rate varies with the type of beverage: $4 per gallon on distilled spirits of more than 100 proof; $2 per gallon on di~tilled spirits of 100 proof or less; 4¢ per gallon on beer; 2¢ per gallon on sweet wine (more than 14% alcohol); l¢ per gallon on dry wine (14% alcohol or less); 30¢ per gallon on sparkling wine. R&T: Div.2 Part 13 Const: Article XX R&T: Div.2 Part 14 B of E collects this tax directly from the distributor through the sale of tax stamps and meter impressions which must be affixed to each package of cigarettes. The Controller apportions 30% of the revenue proportionately to cities and counties through formulas based upon local sales tax revenue and population. B of E collects this tax directly from licensed alcoholic beverage dis- tributors who self-assess the tax. Auditing returns and general adminis- tration of the tax are B of E respon- sibilities. ------- B of E B of E , -f>, TAX , - - - -- -- ---- --- INHERITANCE TAX .. _jt~~_~~~l~--J ______________ ~ESCRIPTION2 ----r A~~~OR;;~-I------ --------~~~;~~-~TR;.;~~~--- - -- ---T-r:r~~~l~-BOD~3-- _____________ . ___ . _______ . ____ ._ ----______ 0---_---- ~.--------.------ $351,694,724 Generally, except for spouses receiv- ing community property, recipients of property through the conditions of a will or the laws of succession are subject to this tax. After allowing for applicable deductions and exemp- tions, the beneficiary is subject to graduated rates based upon both the net amount of the inheritance and the recipient's familial relationship to the decedent. R&T: Div 2 Part 8 Although the Controller has overall responsibility for the administration of inheritance tax law, actual deter- mination and collection functions are largely performed by other parties. The Controller appoints one or more inheritance tax appraisers to each county. Upon initiation of a probate proceeding, the superior court of jurisdiction appoints an appraiser to the probate case. Among the appraiser' duties are inventorying and appraising the estate's assets and determining each beneficiary's tax liability in light of the conditions of succession and applicable exclusions, exemptions and deductions. The appraiser submits a report of determined tax liability to the court and to the Controller. Payment of the tax is made to the county treasurer who then transfers the payment to the State Treasurer. If either the beneficiary or the Controller object to the tax liability assigned by th inheritance appraiser, the may file to have their ob- ject-ions decided by the court presidin over the pro- bate proceed- ings. I .f!> N I ·--_~~:_;X_~~_~~[~_~~~~-i~nl· ~.]_=~~~_~~~ __ OE~~~I ~~~~_-=--=~_] '~~~_~~~IT;]~=-_~ . A;~~~:_~I~=.=~ - r~~EALSBOiY~1 GIFT TAX HORSE RACING PARI-MUTUAL LICENSE FEES INSURANCE GROSS PREMIUMS TAX " $ 13.396.811 $111,590,954 $387,559,798 levied primarily against the donor, this tax applies to the transfer of property by gift. Essentially, the tax is only imposed upon gifts to an individual which. after allowing for specified deductions and exemp- tions, total $25,000 or more in any one year. The amount of tax is de- termined by the net value of the gift(s) and the familial relationship between the donor and the recipient. A tax with rates ranging between 2.50% and 7.45% is collected on the total amount wagered at horse racing meets. In lieu of all other taxes except license fees and real property taxes, insurance companies, with some limited exemptions. pay a tax on their annual gross premiums received for insurance policies. In most instances the tax rate is 2.35% of gross premiums. A 5% rate is levied on the underwriting profits on gross premiums for ocean marine insurance and a 0.5% rate is levied on premiums from annuities. R&T: Div.21 Administration of this tax is the re- Part 9 sponsibility of the State Controller. Donors are required to file a gift tax return with the Controller, who examines its accuracy and determines whether an adjustment of the reported tax liability is required. Gift taxes are paid directly to the State Treasurer. R&T: DiV.2t This tax is administered by the Part 12 California Horse Racing Board, which is responsible for regulating pari- mutual horse racing. Const: Art. XII I Section 28 R&T: Div. Part 7 The Department of Insurance regulates insurers and determines the amount of insurance tax for which they are liabl B of E actually renders the assessment and the Controller collects the taxes. Taxpayer- Controller dis putes regardin gift tax I iabi I Hy are re- solved through the courts· California Horse Racing Board B of E .!. -.-.• -- _._" ...... ,- '--_.'---'" -.~-----------~--.--------•• -.---- , ..". W , " TAX .----r.-~E~~~U~l ---T-·-·--··----~;S-~~~;~~~--·---·-- ·.-r~~~~~~I~;T·-.. -----~~~~~~T~~TION -- .. ~--·-·-·r~-p;EAlS B~~~~'I _'_'_" __ . _, _____ ._ . .l9Zl..7li ". . ... ___ ,, __ ,.,, __ .-----.----- --..- . --.. -----.-------- ..... --- ---- -----,---- --,-------.--. ENERGY RESOURCE SURCHARGE PRIVATE CAR TAX $17,660,401 $ 8,277,118 This is paid by all consumers of elec- trical energy and is used solely to fund the State Energy Resources Con- servation and Development Commission. The surcharge rate is measured in tenths of a mill (1 mi11=1/10 of 1¢) per kilowatt-hour of energy consumed. Based upon projected kilowatt-hour consumption for that year, the rate is recalculated annually so that it will generate the amount of revenue approved by the Budget Act for the operation of the Commission. However, the rate is prohibited by law from exceeding two-tenths of a mill (0.02¢) per kilowatt-hour. This is a property tax levied by the State on the assessed value of rail- road cars neither owned nor leased by a railroad company, but which are used to generate revenue for their owners. Such owners include firms which lease their cars to shippers and companies which maintain their own railroad cars to ship the products they produce. This is the only State property tax. The rate used for this tax is the average statewide local property tax rate from the preceding year . R&T: DiV.21 Electrical utilities in the State Part 19 collect the surcharge as a part of their customer billing process and remit the revenues to B of E quarterly. B of E is responsible for determining the necessary surcharge rate. R&T: DiV.21 B of E determines private car assess- Part 6 ment va1oes, calculates the tax rate, and presents and collects the tax liability due. • ____ ,.~ ___ ._ _ ________ ._ ,._. ___ ._._ •• _ _ , ___ , ___ , __ ._ ••• ~ _______ . __ ~_. ____ • __ l _ ._7 .... _' ____ •.• __ · .. ___ ,. __ .~ _~.--_,_ .. ..----.~-. ------- B of E B of E , .". .". , ,-- TAX REVENUE 1 DESCRIPTlON2 ~------- 1977-78 -- ---.--- ---- TI MBER YIELD $28.854,6594 Effective April 1. 1977, this tax re- TAX placed an ad valorem tax on standing timber. This tax consists of a per- centage levy on the yield of felled Umber. The percentage vari es and is detennined by a statutory forllJJ1a based upon the average property tax rate of the county involved. Th i sis a local government property tax which is administered by the State. -- - 1/ Revenue amounts from the "Annual Report of the State Controller. - 1977-78 Fiscal Year" f! The tax rates cited here were in effect as of January 1. 1979. 11 Taxpayers must first attempt to resolve disputed tax liabilities with the agency which administers the tax. Having exhausted this avenue of appeal without satisfaction. taxpayers may then appeal to the agencies listed in this column. With the exception that Inheritance dnd Gift Tax appeals are initially handled by the courts, these agencies constitute the formal and final adminis- t"dtive appellate body. Tilxpayers dissatisfied \~ith these bodies' ru 1 ings lIIily seek relliedy through the courts. if "Annual Ileport of the State Board of Equal ization, 1977-78" 'f AUTHORITY A (101 I NI STRATION R&T: Div. 2. Part 18.5 B of E is responsible for the adminis- tration of this tax in consultation with the Timber Advisory Committee which consists of five timber-county assessors and one representa ti ve each from B of E, the State Board of Fores try. small seal e timber owners and large scale timber owners. B of E's duties include developing regu- lations governing the methods of calculating timber yield. registering ·taxpayers, processing har.vest data and auditing the returns which timber owners are required to file quarterly. Collections from this tax less admin- istrative costs incurred by B of E are apportioned back to the counties by the State Controller according to past ad valorem tax experience and harvest data. Abbreviations B of C: Board of Control B of E: Board of Equalization Const: California State Constitution DMV: Deparbnent of Motor Vehicles EDD: Employment Development Department FTB: Franchise Tax Board R&T: Revenue and Taxation Code UI: Unemployment Insurance Code UIAB: Unemployment Insurance Appeals Board Veh: Vehicle Code .. APPEALS BODy3 B of E . APPENDIX B County Assessment Appeals Boards Fiscal Year 1977-1978 County Alameda Butte Contra Costa Glenn Kern Los Angeles Marin Merced Monterey Orange Riverside Sacramento San Bernardino San Diego San Francisco San Luis Obisbo San Mateo Santa Cruz Siskiyou Sonoma Stanislaus Totals, surveyed counties Percent of all counties Workload Cost (protests filed) 2,583 $478,000 108 2,658 730 34,161 21 943 1,083 19,655 8,258 550,119 469 29,691 233 6,449 638 9,560 1,333 83,485 432 8,949 613 60,000 508 6,294 1,495 122,752 2,122 99,664 229 6,223 696 29,059 119 5,100 44 2,579 233 6,645 85 1,613 22,022 $1,563,599 83% Total Estimated Cost For All Counties ($1,563,599 f 0.83) $1,883,854 -45- . . APPENDIX C -46- { STATE OF CALIFORNIA EDMUND G. BROWN, Gov.rnor COMMISSION ON CALIFORNIA STATE GOVERNMENT ORGANIZATION AND ECONOMY 12;)9 EIGHTH ST., SACRAMENTO Chairmon HAROLD FURST Berkeley Vice Choir man MILTON MARKS Assemblyman, Son Francisco JOHN T. KNOX Assemblyman, Richmond DON B. LEIFFER Son ~iego GEORGE MILLER, JR. Senator to Martinez MANNING J. POST Se.erly Hill, RICHARD E. SHERWOOD La. Angel .. ROY SORENSON San francisco VERNON l. STURGEON Senator I Paso Roble, DAIR TANDY Oroville FRANK D. TELLWRIGHT Carmel L. H. HALCOMB, JR. Executive Secretory Honorable Edmund G'" Brown Governor, State of California Honorable Hugh H. Burns December 28, 196~ President pro Tempore, and to Nembers of the Senate Honorable Jesse M. Unruh Speaker, and to Members of the Assembly Gentlemen: In recognition of the importance of tax administration to the state government and to the individual taxpayer, the Commission on Californil State Government Organization and Economy in the spring of this year initiated a comprehensive review of the current orgrnizational status of the State's principal revenue collection agencies. Subsequently in a letter to the Commission in June, Governor Brown stated that, although there had been several major studies of state revenue administration in the past, he believed the time appropriate to consider again the ?ossibility of consolidating all or most revenue collection activities within a single department. Accordingly, the Com- mission added this important organizational consideration to its study agenda. This letter summarizes the findings and recom- mendations of that study. The issue of consolidation of revenue administration in the California State Government is not net.,; the matter has a long history of continued study. These many studies have been remarkedly consistent in their emphasis on the desirability of consolidating revenue administration in one organizational unit responsible to the State's Chief Executive--the Governor. One of the first study groups to recommend a tax agency respon- sible to the Governor was the California Tax Commission authorized by the Legislature in 1927. Since that study, there have been at least 15 se~arate studies by outside agencies or legislative com- mittees that have recommended some consolidation of the major taxing agencies as a sound organizational objective. In 1955 a subcommittee of the Assembly Interim Committee on Government Organization concluded that: -2- "CalHornia's rl!venuc administration structure should be organized to piovide a reasonably efficient, economical, undcrstandabl~, and responsibl~ vehicle for administering our ta:< laws. This can be accomplished best by placing the administration of major state taxes in a Department of Revenue headed by a Director appointed by the Governor, confirmed by the State Senate, removable by the Legislature for cause, and, therefor~, responsible to the Governor and the Legislature, and through them, to all of the people." f This recommendation was repeated in substantially the ·same form in 1959 by the Governor's Committe~ on Organization of State Government and it has been reiterated by the Legislative Analyst in nearly every budget analysis report since 1943. Current testimony before this Connission, as well as independent staff study, has substantiated the validity of the findings of those many past studies. It is clear that further documentation of the conclusive evidence on record would be repetitiolls--the logic of a Department of Revenue for California has been very well established. In addition, both the State Controller and the Chairman of the Board of Equalization stated their belief at the Commis- sion hearing on this subject on August 20, 1964 that the unification of revenue collection activities would result in economies and other benefits to the State. Government as well as to the individual taxpayer. Clearly, the time has come to set aside those considerations that have blocked con- structive action in the past. The Commission no\" proposes the establishment 0'[ a strong Department of Revenue with a Director appointed by and responsible to the Governor for state tax administration. Thus, the Legislature and in turn the people 'would be able to focus responsibility for the administration of the major revenue collection activities of the state government (see chart). The August 19, 1964 proposal to the Commission, prepared by the Department of Finance, has been reviewed as one alternative organizational arrangement of revenue collection activities. The members of the Commission concur unanimously with the goal of consolidating most tax collection functions in one agency and for the provision of an independent tax aopeals body. The suggested structural arrangement, however, does not provide an effective answer to one of the major shortcomings of the present unconsolidated revenue agency--that of diffused responsibility for revenue administration. The proposal of the Department of Finance would perpetuate the combination of boards and elective and appointive officials as responsible for the State's revenue collection program. Such a combination has been indicted as inef- ficient and irresponsive to taxpayers' needs by every previous study. In the opinion of this Commission, revenue collection is a ministerial act for \o/hich resnonsibility can and should be clearly and definitely establish~d in the executive branch of the state government. Line authority and respon- sibility for this function, therefore, should be placed with a Director appointed by the Governor \o/ho as the executive head of state government is finally responsible under th~ Constitution [or th,.! enforcement of all laws. i -3- The Department of Revenue as proposed by this Commission would succeed to all activities of the Franchise Tax Board and to all non-constitutionally assigned tax collection functions of the State Controller and the Board of Equalization. The revenue collection responsibility of the Department of Motor Vehicles, the Department of Employment, and the Horse Racing Board would remain unaltered. The Board of Equalization responsibility for insurance company tax assessment, alcoholic beverage tax administration, equalization determinations, public utility valuation determinations and asseSSment standards would also remain unchanged. The proposed organiza- tional arrangement and functional assigrunent, which in basic concept is neither new nor unusual, is illustrated by the attached chart; The Commission proposal, which can be implemented without constitutional revision, also calls for the statutory assigrunent of the tax appeals function to the State Board of Equalization. In this wayan independent board of constitutional officers, responsible to the electorate, would serve in the important capacity of hearing appeals related to taxes collected by the proposed Department of Revenue. We make no recommendations as to the internl'll structure of the new depart- ment. The Director, subject to appropriate legislative approval, should be free to work out the internal details of integration of responsibility and geographic distribution to meet the requirements of effective administra- tion. Commission ~commendations relating to inheritance tax administration, however, are contained in a separate communication of this date. The use of qualified personnel employed on a full-time basis in accordance with Article XXIV of the State Constitution in such matters as the adminis- tration of functionally integrated sys terns of tax appraisals, audi t" and collections through consolidated field offices and shared housekeeping and staff services will do much toward the effective implementation of a uniform tax collection policy. This Commission is convinced that taxpayer convenience as well as economy and increased efficiency can result from the es tablishment of Department of Revenue as proposed ~"hen organized and operated in accordance with modern revenue management principlt~s. Respec tfully, \--I: CL n.;yt£2"l- (ifl~ Harold Furst, Chairman Assemblyman Milton Harks, Vice Chairman * Assemblyman John T. Knox Don B. Leiffer State Senator George Miller, Jr. Hanning J. Post Richard E. Sherwood Roy Sorenson State Scn3tor Vernon L. Sturgeon Dair Tandy Frank D. Tdlwright ;, See statement of Assemblyman Hilton Marks attached. STATE OF CALIFORNIA EDMUND G. BROWN. (00"'"0' COMMISSION ON CALIFORNIA STATE GOVERNMENT ORGANIZATION AND ECONOMY 1209 EiGHTH ST.. SACRAMENTO Chairmon HAROLD FURS r Be"elov Vice Chairman MILTON MARKS Assemblyman, Son Francisco JOHN T. KNOX Assemblyman, Richmond DON B. LEI HER Son Oiego GEORGE MILLER. JR. Se"otor, Motti"ez MANNING J. POST Beverly Hills RICHARD E. SHERWOOD los ''''"9_lel ROY SORENSON Son Francisco VERNON L. STURGEON Senator, PalO Roble, DAIR TANDY Oro.ille FRANK D. TELLWRIGHT C4rmel· L. H. HALCOMB. ·JR. ~x .. eu';v. Seeretary December 28, 1964 STATEl-lENT .Qf ASSEMBLYMAN HILTON MARKS I have long favored the concept of a ~onsolidation of the revenue collecting agencies of the S tate of California and have introduced legislation to carry out this purpose. This legislation and alternative propnsa1s relating to this subject are being studied by the Assembly Interim Committee on Government Organization of which I am the. Chairman. While I have participated in the discussions of this Commission and support its endorsement of the principle of revenue consolidation, I feel it appropriate to await the January report of our Assembly Committee which might differ in certain particulars, and I am therefore not signing this report at this time. /s/ Assemblyman Milton Harks, Chairman Interim Committee on Government Organization OFFICE Of' THE CONTkOI..L£R No tax collections C •• allne tax refunds Audit funCliuns c ... (" leio lohed lance tax al 1pralsilils Lt;Gt:HD .. ORCANll.ATIO~ FOR REV£N1)E Al»tlNlSTRATlOW IN Cl.L1FORMA AS PROPOSED BY COHHISSION ON CAurOIJlLt. STATE OOV!JUOt£lrft ORGANIZATION AND ECOtICI(Y ALL V 0 T E R S. S TAT f. l' F CAL 1 FOil .N I A VOl Las First Equalization Diatrict VOTERS Second Eq~lil..tion Dlstcict VOTERS Thlcd Equaliutlon Dlatrict VOTERS Fourth £qutlUZation Dhtrict ROARO OF EQUALIZATION "NO BOARD OF TAX APPEALS 88 8 Adtn ill ls ten. Alcoholic Beverage excise ( .. xes Insurance COllipany tax (assesament) AcUvUles other than tax collection [qua J 1 &a t ion A8se8.ment Standards Valuation of public utility properties Hears appe." related to taxe5 collected by Departaent of Revenue __ Advisory or cooperal1ve ~el.t1onshlp DUI!(.[ lind of .uchortty or r~sponsibility -... ~osl11on ludd by vinut' of holding .. not her offhe o [loelod 0'1<"_1 <> Appointc!,.! of tht:! Gllv<!rnor (Ilon·(. lvil servic!!) '" Ch.linn.n ro.>tates .nn".lly ,jt.\OOIl-, llIemt.",II. D.HARTMENT Of' Rl"VENUE <:?> Personal incOMe tax. Bank and corporation taxes Gift tax Inheritance tax Retail sales and use taxes CasoUne tax (collection only) Diesel t&Jl Truck. tax Pri vatt:! cat tax Cigaret te tax Subacrtption T. V. tax Insurance cOMpany tax (collection only) 't. ... ' U!'PAl1'WENT or IIOI'OIl VEHICLES <:?> Drivet. I Licenses Motor vehicle reltalution and I tcense fees In Lteu tax DEPARTMENT OF INSUltAHCI! Share ."inistraUon of laurence C'*Pany tax throulh preparation of annual Irepon. fro. which Board of £quali.ation .. kea ••• ea • .enta. Cl.LlF01l1!IA ItOIlSE IlACING BOAIUl 0<8>0 Licenses Palri.-.aluel [&.xes Dece.ber. 1964