Just Say No to the Lumber Tax

Michele Steel
California State Board of Equalization Member and former small business owner

The proposal to create an additional tax on the retail sale of lumber currently coursing its way through the Legislature is an example of the worst kind of state policy. This tax would be used to fund the state agencies involved in Timber Harvest review and regulation, thus shifting the financial burden of these agencies […]

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Appeals Court Overturns 1550% Tax Hike on Flavored Beers

Michele Steel
California State Board of Equalization Member and former small business owner

Despite serious constitutional and legal questions, the Board of Equalization (BOE), in 2007, approved a 1550 percent tax increase on “flavored malt beverages.” Flavored malt beverages are drinks such as Mike’s Hard Lemonade and Smirnoff Ice – beer-based drinks with flavor added.  In 2008, the BOE – on a party-line vote – changed the definition […]

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Strengthening Taxpayer Rights at the BOE

Michele Steel
California State Board of Equalization Member and former small business owner

Each month, Board of Equalization members meet to hear tax appeals relating to nearly every facet of California’s complicated tax code. Sometimes the outcome of those appeals is so outrageous that it calls for legislative action. In 2009, a taxpayer who had a good payment history came before the board because he had recently failed […]

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Restoring Interest Equity on Taxes

Michele Steel
California State Board of Equalization Member and former small business owner

Hard as it might be to imagine, California businesses won a small but important victory last year.  Next year, legislators will have an opportunity to reverse a twenty-year trend and give businesses another victory. In 2010, Governor Schwarzenegger signed Senate Bill 1028, a  bill sponsored by the Board of Equalization (BOE), which gives BOE members […]

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Long Beach City Council Should Oppose Bag Tax

Michele Steel
California State Board of Equalization Member and former small business owner

It
seems like we can’t turn on the news without hearing about skyrocketing gas
prices, California’s persistent double-digit unemployment rate, and families
struggling to make ends meet.

The
cost of groceries continues to climb everyday as items such as dish soap,
produce, and dairy are marked up because of rising commodity prices.

In
this climate of uncertainty, every nickel counts. Yet efforts to raise taxes
middle and lower income families continue. 
One of them is coming before the Long Beach City Council in just a
matter of days.

At
their meeting on tonight, the Council will vote on a proposal to ban recyclable
plastic grocery bags and impose a ten-cent tax on paper bags at the checkout
stand.  Put simply, a yes vote on this
proposal is a vote to increase taxes that brings with it little promise of
benefit to Long Beach residents, puts hundreds of manufacturing jobs at risk,
and does nothing to strengthen our recycling infrastructure.

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The unseen cigarette-tax crime wave

Michele Steel
California State Board of Equalization Member and former small business owner

Originally posted in the Orange County Register.

Sophisticated criminal organizations have one
incentive: money. They find a need and fill it. It doesn’t matter whether the
product is narcotics, prostitution or terror, the goal is the same; more money.
They use that money to fund their other illegal activities.

As a result of rising tobacco taxes across the
country, these organizations are increasingly moving to cigarette smuggling for
the potential profit. Cigarette-related crime is rising across the U.S. In California,
1.4 billion packs were estimated to have been consumed in fiscal year 2005-06.
And 209 million packs were estimated to have been sold tax-free, resulting in a
$182 million revenue loss for the state. That’s more than the general fund
budget for Huntington Beach.

There’s no doubt that higher cigarette taxes lead
to less smoking; that’s a basic law of economics. According to the State Board
of Equalization, "For cigarettes and nearly all goods there is an inverse
relationship between prices and sales. Higher prices almost always result in
lower sales if there are no other major changes in government policy, consumer
preferences or other factors."

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California’s Captain Kirk Tax Code

Michele Steel
California State Board of Equalization Member and former small business owner

In the Star Trek original series episode "A
Piece of the Action," Captain Kirk invents a complicated and confusing card
game, which he calls Fizbin.  The rules are depressingly similar to
California’s sales tax code.

An excerpt from Wikipedia: "Each
player gets six cards, except for the player on the dealer’s right, who gets
seven. The second card is turned up, except on Tuesdays. Kirk deals one player
two jacks, which are a ‘half-fizbin.’ When the player says he needs another
jack, Kirk warns that a third jack is a "shralk" and is grounds for
disqualification. With two jacks, one wants a king and a deuce, except at
night, when one wants a queen and a four." 
As the game proceeds, the rules keep changing.

Some examples of California’s fizbin tax
code:

Food products in California are exempt from
the sales tax, "unless otherwise specified."

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One More Tax to Pay Before Tax Day

Michele Steel
California State Board of Equalization Member and former small business owner

A new law, which might take the prize for the worst piece of legislation in 2009, requires nearly 200,000 California businesses to register and file use tax payments with the Board of Equalization (BOE) by April 15th. This onerous regulation will cost more to comply with – because of the unbelievable inconvenience it causes business owners – than the state will make in revenue.

The new law requires all business owners with gross revenue over $100,000, that are not already registered with the BOE, to register for a use tax account and file use tax returns for 2007, 2008, 2009, and for every year in the future.

That’s right: three years of filings will be due on the same day taxpayers must file state and federal income tax and payroll taxes.

AB 4x 18 was signed into law in July 2009. The Board rushed to begin implementation in November 2009, but many businesses received the news as late as mid-March 2010, and more have yet to be notified. If you haven’t received a letter and your business makes over $100,000 in gross revenue, it is your responsibility to register and file use tax returns by April 15th.

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Fortune 500’s Flee California

Michele Steel
California State Board of Equalization Member and former small business owner

California has been afflicted by the curse of the runaway
corporation for sometime now. With the announcement on Monday that aerospace
giant, Northrop Grumman Corp., will be moving its headquarters from Los Angeles
to Washington D.C., we lose the last major aerospace firm in the state.

Northrop, California’s 3rd largest Fortune 500
Company, is the most recent departure in a long list of top companies to leave
the state.  As reported in the Los
Angeles Times
, Northrop’s relocation means only 19 Fortune 500′s remain in
California, when in 2006 there were 23. 
Though the company will still be one of the state’s largest private
employers, the loss is a blow to California, the birthplace of the aerospace
industry.

Northrop’s CEO, Wes Bush, says the company is moving its
headquarters to be closer to its biggest client: the U.S. Government.  But the move makes a bigger impact when
we look at other industries that have been fleeing California. Hilton
Hotels Corp
. recently relocated to Fairfax, Virginia, to lower its cost of
doing business. EBay,
the online auction website with deep roots in San Jose, recently announced it
will be creating 450 new jobs at a $334 million complex in Utah, in return for
$30 million in tax breaks from the state. 
And there’s much more….

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Global Warming Plan Kills California

Michele Steel
California State Board of Equalization Member and former small business owner

A U.S. Treasury Department study shows that the national Cap and Trade plan (Cap and Tax), which passed through the House in June, will cost American households nearly $2,000 a year.

In California we don’t have to wait for the U.S. Senate to pass Cap and Tax to feel the massive burden of government’s attempt to insignificantly slow Global Warming: We have AB 32, the Global Warming Solutions Act of 2006, as law today. For three years, the California Air Resources Board (CARB) has been hard at work inventing environmental regulations that will kill the California economy.

AB 32 is a plan to reduce greenhouse gas emissions in California to 1990 levels by 2020, and by 80% by 2050. CARB is charged with imposing and enforcing measures to reduce greenhouse gas emissions from nearly every phase of life and work in the state.

A June study, commissioned by the California Small Business Roundtable, concluded that the plan could result in average annual losses of $182.6 billion, or 10%, of gross state output – that’s one and a half times the state budget – from small businesses alone. That translates to nearly 1.1 million lost jobs. The report also estimates a cut of more than 25% in the average family’s discretionary spending.

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