04/18/2008
For new businesses, California's primary business tax collector, the Board of Equalization (BOE), requires a security deposit as high as $50,000 to ensure that these businesses pay their tax bills. The deposit is due to be returned in three years if the business pays all taxes due. However, a recent investigation into practices of the Board of Equalization revealed that nearly $40 million in illegally withheld security deposits.
For small businesses that follow all the rules, it is an outright injustice for government to illegally withhold their money, but current law does not provide small businesses with any compensation in this situation. NFIB sponsored legislation along with BOE Board Member Michelle Steel that mandates BOE to pay interest on the illegally withheld deposits. AB 2152 by Assembly Member Mike Duvall cleared the Assembly Revenue and Taxation Committee this week, the first step.
While BOE staff is making progress on the release of backlogged deposits, NFIB is committed to making sure that BOE pays back law-abiding small businesses for the inconvenience. If you believe that the BOE has withheld the security deposit beyond the three year limit, contact your BOE member or the BOE Taxpayers' Rights Advocate.
