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Sacramento Tax Law Blog

Federal Bill Introduced to Simplify State Income Taxes for Mobile Workers

The Mobile Workforce State Income Tax Simplification Act of 2017, which aims to make a person's wages and other remuneration subject to income tax only in the employee's state of residence and the state where the employee was physically present and performed employment duties for more than 30 calendar days, was passed by the U.S. House of Representatives on June 20, 2017. Employers will not have state income tax withholding or reporting requirements for employees who do not fit these criteria. Certain classes of workers will not be considered employees for the purposes of this bill, including professional athletes and entertainers; film and video production employees; and prominent public figures providing services on a per-event basis. The U.S. Senate Committee on Finance currently has the proposed bill under review.  Click here to track its progress.

Taxpayer Transparency and Fairness Act Presented to Governor Brown

The Taxpayer Transparency and Fairness Act of 2017, which will create two new entities (the California Department of Tax and Fee Administration and the Office of Tax Appeals) to take over most of the California State Board of Equalization's functions, has passed both the Assembly and the Senate and was presented to Governor Brown on June 21, 2017. Once approved by the Governor, the bill will take effect on July 1, 2017.  Keep track of developments in the bill process here.

Confusion and Uncertainty at the BOE

The Board of Equalization is attempting to respond to the California Legislature's mandate to turn over most of its authority to two newly created agencies, the California Department of Tax and Fee Administration, and a Department of Administrative Tax Appeals. It's obvious that the short time frame and political climate have the Board of Equalization members and management scrambling to meet the July 1, 2017 deadline for most of the changes to occur. The Governor is expected to sign the Taxpayer Transparency and Fairness Act of 2017 into law any day now.

California's Fast Track to Tax Reform

As of July 1, 2017, California's State Board of Equalization will likely be a thing of the past. Lawmakers voted on June 15th to pass Senate Bill 86, The Taxpayer Transparency and Fairness Act of 2017, which will rapidly create a new Department of Tax and Fee Administration that will fall under the umbrella of the Government Operations Agency and take over all of the Board's non-Constitutional functions from headquarters in Sacramento. The only responsibilities left to the Board will be property tax administration, tax rate setting, and some other minor duties.

Could Physical Presence Make a Comeback for Sales and Use Tax?

If Congressman Jim Sensenbrenner (R-WI) and House Judiciary Chairman Bob Goolatte (R-VA) get their way, it will. On June 12, 2016, Sensenbrenner and Goolatte introduced the "No Regulation Without Representation Act of 2017" which would expand the "physical presence" requirement of a similar 2016 House Bill (H.R. 5893) to all taxes and to all regulations in general.

Worker Classification to be Tested in California Supreme Court

In January, 2015, the California Supreme Court granted review of Dynamex Operations West, Inc. v. Superior Court (Lee) (2014) 230 Cal.App.4th 718.

Department of Labor Eases Federal Guidance on Use of Contract Labor

U.S. Secretary of Labor Alexander Acosta announced on June 7, 2017 that the Department will no longer follow the informal guidance issued as Administrator Interpretation Letters in 2015 and 2016 regarding joint employment and independent contractors [here], signaling an easing of the federal guidance on the use of contract labor. According to its press release, "The Department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act." To read the full press release, click here.

TIGTA Releases Semi-Annual Report to Congress

The Treasury Inspector General for Tax Administration (TIGTA) has released its semi-annual report to Congress for the period October 1, 2016 through March 31, 2017. The reports summarizes data about the agency's notable audits, investigations, inspections, and evaluations to provide oversight to the IRS.

2017 IRS Tax Forum Registration Is Open

The Internal Revenue Service (IRS) hosts annual tax forums in various cities around the country throughout the summer months. Betty Williams will be speaking about tax audit triggers and tips at the IRS Nationwide Tax Forum held in San Diego, California, from September 12 through 14, 2017.

New DOJ Charging and Sentencing Policy

On May 10, 2017, U.S. Attorney General Jeff Sessions issued a memorandum to all Federal prosecutors, laying out the core principles of charging and sentencing policy for the Department of Justice under the Trump Administration. Namely, prosecutors have been instructed to "charge and pursue the most serious, readily provable offense" and "disclose to the sentencing court all facts that impact the sentencing guidelines or mandatory minimum sentences." Exceptions to the "strict application" of these guidelines must be clearly documented and then approved by a U.S. Attorney, Assistant Attorney General, or designated supervisor. This new policy memorandum explicitly rescinds certain policies set forth by the Obama Administration.

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