The Board of Equalization (Board) has an appeals system for tax assessments which allows anyone to represent taxpayers, or they can represent themselves. The system is designed so that Board attorneys and auditors involved in the appeals process are unbiased, make an independent review of the case, and get a fair outcome for the taxpayer and Board. This does not guarantee, however, that the taxpayer will always get the best results. This article addresses the steps that should be taken to help ensure your appeal is successful. While it focuses on California […]
By Lucian Khan, Of Counsel to McClellan Davis
This article discusses some of the complexities of the California sales and use tax law, as it applies to construction contractors. Pursuant to California Code of Regulations, title 18, section 1521, Construction Contractors, a construction contract is a contract to erect, construct, alter or repair any building or structure, project, development, or other improvement to realty. However, the tax consequences can vary depending on the type of property installed, how the property is installed, the type of contract you have, how the contract is billed, whether the contractor does any further processing before […]
Next week the California State Board of Equalization (BOE) will be considering changes to Regulation 1502 (Computers. Programs. and Data Processing), and Regulation 1507 (Technology Transfer Agreements), or TTAs. The proposed changes relate to the TTA status of certain transfers of canned software on tangible media (tapes and discs) that also include the transfer of copyright and patent interests, which allow the transferee to reproduce or copy the software.
The pending changes are based on the California Supreme Court’s recent denial of BOE’s petition for review of the Court of Appeal’s opinion in […]
This article discusses the difference between leases and sales of tangible personal property (property), the rules applied to leases, and how sales tax applies to leases of mobile transportation equipment in California.
A lease is a temporary transfer of possession and control of property for consideration (i.e., something of value, usually money), and the property is later returned to the lessor. In a sale title to the property is transferred for consideration, so ownership changes and the property is not later returned.
The California State Board of Equalization (Board) has promulgated Regulation 1660, which explains the law as it […]
This article discusses the application of tax to transfers of business (capital) assets, when a business is sold, reorganized, or dissolved. It also discusses problems which can occur when transactions are not properly structured, and sales tax issues that may arise.
Generally, sales tax applies to the retail sales of tangible personal property. Thus, when a business is sold, tax does not apply to intangibles, inventory for resale, or realty. Tax applies to any remaining sales of tangible personal property (capital assets) used in a business, unless an exemption or exclusion from tax is available.
Regulation 1595 discusses the rules for exempt […]
UPDATE: On January 20, 2016, the California Supreme Court denied the Board of Equalization’s petition for review of Lucent. Thus, the TTA issue regarding software has now been put to rest.
This article discusses how tax applies to technology transfer agreements (TTAs) in California, and recent developments regarding the TTA status of prewritten software programs resulting from Nortel Networks Inc. v. Board of Equalization (2011) 191 Cal.App.4th 1259 and Lucent Technologies, Inc. v. State Board of Equalization, Docket No. B257808. A TTA is defined as an “agreement under which a person who holds a patent or copyright interest assigns or […]
Former Board of Equalization Appeals Attorney, Lucian Khan,
provides a unique perspective on cases which could have avoided the appeals process.
It’s always best to resolve tax cases at the lowest possible level in order to avoid unnecessary time and expense. This article discusses cases that could have been resolved prior to the appeals process, if they were handled properly. By understanding the oversights that occurred in the presented cases, it may help you or your client avoid similar oversights.
Prior to my association with McClellan Davis LLC, I worked as an attorney for the California Board of Equalization’s Legal Department. […]