This year, I am sponsoring legislation to extend common sense protections to taxpayers. Assembly Bill 867, authored by Assemblyman Donald Wagner, would require the state to provide a full refund to all individuals who paid a tax later declared unconstitutional or illegal.
AB 867 is identical to AB 2510 (Wagner) and SB 1327 (Knight), legislation I sponsored in 2014. Legislative committees blocked both bills from advancing last year.
It is criminal that the State of California can keep money it illegally collects from its citizens. Anyone who in good faith pays what ends up being an illegal tax should get their money back. It’s as simple as that.
Currently, taxpayers are only eligible to receive refunds if they have exhausted all their administrative appeals remedies, even if the tax they paid is later declared illegal or unconstitutional. AB 867 would require the state to automatically issue refunds to taxpayers whose information is up to date. It would also 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.
The bills would apply to state taxes and fees paid by both businesses and individuals, including the controversial Fire Prevention Fee. Even if a class action lawsuit challenging the fire fee is successful, under current law only taxpayers who filed appeals within 30 days of the date on their bills would be eligible for refunds.
As Assemblyman Wagner says, “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. The State needs to reimburse the taxpayers as quickly and painlessly as possible – it is not our money.”