George Runner, Board of Equalization Member, announced he is sponsoring legislation that would refund illegal tax money taken from Californians, state officials said Monday.
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The legislation, Assembly Bill 2510 and Senate Bill 1327, would extend common sense protections to taxpayers by requiring the state to provide a full refund to all Californians who paid a tax that was later declared unconstitutional or illegal, according to a news release by Runner’s office.
“It is criminal that the state of California can keep money it illegally collects from its citizens,” Runner said. “Anyone who, in good faith, pays what ends up being an illegal tax should get their money back. It’s as simple as that.”
Under current laws, taxpayers must exhaust all administrative appeals remedies in order to be eligible to receive a refund, regardless of whether the tax they paid was later declared illegal or unconstitutional, according to the news release.
Instead of requiring taxpayers to go through a difficult appeals process, the new legislation ensures that they have a realistic and easy avenue by which they can have their money refunded, according to a news release by Sen. Steve Knight, R- Antelope Valley, who introduced Senate Bill 1327 last month.
The new legislation would require refunds to be automatically issued to taxpayers whose information is up to date and open up an additional appeals period of one year after a state tax is declared illegal or unconstitutional, giving taxpayers a chance to apply for the refunds they deserve, state officials said.
“When government makes a mistake, they need to do the right thing. This bill would return illegally collected taxes to the taxpayers. It’s just common sense,” Knight said.
“It’s one of those issues where most people think that it’s probably the law anyhow,” Runner said. “The average taxpayer thinks that if they pay the tax and the court determines that it is illegal or unconstitutional, they would be getting their money back, and rightfully so.”
The legislation would apply to state taxes and fees paid by both businesses and individuals, including the controversial Fire Prevention Fee, an annual tax signed into law July 7, 2011 that pays for fire prevention services and is assessed on property-owners located where the state of California is financially responsible for the prevention and suppression of wildfires, according to the California Fire Prevention Fee’s website.
Even if a class action lawsuit challenging the fire fee is successful, without the new legislation, only taxpayers who filed appeals within thirty days of their billing date would be eligible for a refund, state officials said.
“When California taxpayers have been illegally forced to pay a tax, it should not be their responsibility to fill out paperwork that they may or may not know exists, in order to recoup this money,” said Assemblyman Donald Wagner, R-Irvine. “The State needs to reimburse the taxpayers as quickly and painlessly as possible–it is not our money.”
The bills are currently in the early stages of introduction and their first hearings can be expected in the next 60 days, state officials said.
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