Measure B Tax Collection Date - What was Behind the Change?
Early in June, a merchant in downtown Grass Valley showed me a notice from the California Department of Tax and Fee Administration (CDTFA). The notice explained that the state would begin administering and collecting the Measure B Transaction and Use Tax July 1, 2024.
My understanding at the time in reading Measure B was the operative date they could begin taxation was October 1, 2024.
Section 2: “‘Operative date’ means the first day of the first calendar quarter commencing more that 110 days after the adoption of this ordinance.”
What was I missing? I looked back at the two agreements with CDTFA proposed by Resolution No. 2024-13. The one covering administration of the tax, under “Miscellaneous Provisions” states “The agreement shall take effect on July 1st, 2024.”
Believing this was an error on the part of the City, I wrote a June 5 letter to the City Manager, Mr. Kiser, asking several questions. None have been answered by the time of this writing. My stated conclusion to Mr. Kiser was the City had erred. This letter was copied to the City Council.
On June 6, I took it upon myself to notify the CDTFA Administrator, Local Revenue Branch, with the same concern. This was also copied to Mr. Kiser and the City Council.
This was not my first letter to CDTFA. My April 26, 2024, letter gave them three examples of concerns about information placed before the electorate regarding Measure B:
The BALLOT QUESTION.
The IMPARTIAL ANALYSIS .
The City Council’s Argument in Favor of Measure B.
I implored the CDTFA not to enter into the agreements with the City as the City had so grossly misled the voters regarding the Measure.
As there was zero response to my June letter, I began looking for other resources. I located a division within the CDTFA titled “Taxpayers’ Rights Web Request”. On June 12, I sent along the June 6 letter sent earlier to the CDTFA Local Revenue Branch.
Not a word from anyone regarding my three attempts to raise the red flag. July 1 was approaching rapidly.
On June 25, Claudette Yang, Chief of the Taxpayers’ Rights Web Request division sent an after-hours personal email apologizing for not contacting me. She wrote: “Our department is aware of this situation and is working on it and I hope to have more information to share before the end of this week.”
The next day, June 26, an official email from Ms. Yang read: “The department issued a Special Notice by email and mail to affected taxpayers to notify taxpayers that the Grass Valley District Tax operative date changed from July 1, 2024, to October 1, 2024.”
My curiosity was piqued. What was behind the change? Was the State government responding to a citizen, or had the “experts” at the CDTFA spotted the error and set out to fix it?
I emailed Ms. Yang asking if the City of Grass Valley requested the change, or was this a unilateral action on the part of the CDTFA? Was the CDTFA influenced by input from the public? Ms. Yang replied: “I’m told that the department was already reviewing this and determined that the adoption date was in April, so we moved the effective date.”
So, let’s think for a moment. According to Ms. Yang, CDTFA had started reviewing this rather weighty problem even before receiving my June 6th letter. Problem? They were about to begin administering and collecting a tax on patrons within the City of Grass Valley three months earlier than allowed by ordinance. The CDTFA finally determined it had erred and sent out the correction on June 26. It took the CDTFA over 20 days to interpret the wording in Section 2 of the Ordinance, find the mistake, and get the word out.
Why did they sign the agreement with the City of Grass Valley and put out the original notice of July 1st to begin with? As a lay person, I knew the operative date for the new tax was October 1st, and I am not getting paid to know these details.
We do not know for sure what motivated the CDTFA to change the operative date. I suppose we will never know. I suspect that is the way they want it.
You will have to decide for yourself.
There are several additional technical problems with the Measure B process. I have addressed the ones of which I am aware to the City in writing. I am still waiting for answers to several make-or-break questions.
As I told the City Council prior to the March 5 election, I am not debating the wisdom behind the need to collect an additional tax to fund increased protection from wildfires. I do, however, remain troubled that the electorate was grossly misled by Measure B at the direction of City staff, the City Attorney, and the City Council.