SACRAMENTO- Assemblyman Tim Donnelly's Assembly Bill 2048 passed out of the Assembly Revenue and Taxation Committee today with unanimous support.
This bill, sponsored by the California Board of Equalization (BOE), will ensure that interest rates will be calculated the same way for underpayments as they are for overpayments. When government owes taxpayers, it will then pay the same interest rate required of Californians who owe taxes.
Donnelly said, "I am grateful to the Members of the BOE for their responsible fight on this issue. They have been critical partners in moving this bill forward."
Under current law, citizens are charged 7% interest on tax underpayments, but the government pays 0% interest on debts owed to taxpayers.
Assemblyman Donnelly said, "Government exists only by the consent of the governed, but for far too long it has required more of us than it is willing to do itself. Today we took a critical step toward remedying this disparity in the system."
He continued, "Government must live under the rules it imposes; AB 2048 moves us in the right direction."
From 1937 to 1991, the interest either party owed was calculated the same way. In 1991, however, the Legislature created the current bureaucratic inequity. Since that time the Board of Equalization has sponsored similar measures eleven times.
This measure is supported by the Howard Jarvis Taxpayers Association and the California Taxpayers Association. It will be heard next in the Assembly Appropriations Committee.