New Laws Regarding State Taxes

Several laws took effect this week designed to crack down on tax fraud, as well as create new taxpayer protections and exemptions.

The California Board of Equalization reports that AB 781 makes it a crime to use or sell “zappers.” The technology is used to hide sales transactions in order to evade paying taxes.

AB 576 authorizes agencies to exchange information used to investigate underground tax-dodging operations. Part of the effort is the creation of a Collaborative Enforcement Team composed of the BOE, Franchise Tax Board, Employment Development Department and Department of Justice.

SB 442 requires that that taxpayers be notified of bank charges that they may incur due to a BOE processing error.

SB 90 creates a sales and use tax exemption for companies that manufacture research and development equipment. Through the year 2022, manufacturers will receive a 4.18% sales and use tax exemption on qualifying purchases. It is designed to spur more investment dollars into the sector.

AB 551 allows municipalities to create Urban Agriculture Incentive Zones to offer landowners preferential property tax assessments if they use the land for “small scale” agriculture.