Senator Bradford (D- Gardena) introduced SB 1082, sponsored by Board of Equalization Member, Fiona Ma, to grant relief to hardworking Californians who encounter financial hardship. SB 1082 allows the Franchise Tax Board (FTB) to provide a one-time late fee waiver to individuals with a history of on-time, personal income tax payments, aligning our state law with federal tax law.
“Individuals who have been contributing to our economy and have proven a consistent pattern of paying their taxes on time, should not be penalized,” said Senator Bradford. ”If anything else, this is a disincentive for future payments and a ‘tough on taxes’ mentality that makes it increasingly more difficult for California families to survive.”
Currently, if a taxpayer is late in either filing or paying their taxes, they are significantly penalized. At the state level, the fines start at 5 percent of the total tax amount due and increase incrementally up to 25 percent of the total amount due. Only individuals who have paid their taxes on time for at least the prior three years would be eligible for relief under SB 1082. Federal law already allows the Internal Revenue Service (IRS) to forgive penalties for late filing or payment if the taxpayer has a proven history of timely payment, but California law has not been updated to authorize FTB to provide the same relief.
“Life can be unexpected – a wildfire destroyed your business, you changed banks and paperwork was misplaced, or you were running to a soccer game and left your purse at home. Sometimes, you can forget to make a tax payment when in the past you’ve consistently paid on time,” said Board of Equalization Member Fiona Ma, CPA. “The IRS forgives late filings, one time for taxpayers that have consistently paid on time, and the state should offer the same.”
“The Franchise Tax Board estimates that approximately $25 million in revenue from penalties would qualify for relief under SB 1082,” said Senator Bradford. “This is money that should remain in the pockets of our hardworking, taxpaying Californians. It is good for our economy, good for our constituents and the right thing to do.”