NORTHERN CALIFORNIA – This week Assemblymember Cecilia Aguiar-Curry (D-Winters) introduced AB 525 to help small and new businesses stay open when faced with unexpected tax bills.

“The tax code is complex for anyone, but for a new business it can be overwhelming and lead to unintended mistakes. Few small businesses have accounting specialists, so the responsibility falls on the owner. The Offer in Compromise Program provides entrepreneurs with a second chance if they find out that they’ve made a mistake calculating or reporting their taxes,” said Aguiar-Curry.

The Board of Equalization, or BOE, operates the Offer in Compromise Program, which gives BOE authority to compromise on a tax plan with a business owner who may be unable to pay unexpected business taxes in full. 

This can happen if the owner does not realize their transactions are subject to sales tax and can force them to close.

“Running a small business in California is challenging and sometimes they run into trouble. Small businesses are vital to California’s economy and the Offer in Compromise program is a critical tool that helps these mom and pop stores stay open,” said Board of Equalization Chairwoman Fiona Ma, CPA. “The end of this program would devastate small business owners trying to stay afloat, while simultaneously causing an unnecessary hit to California’s economy. We need AB 525 to continue this important program to keep our businesses running and contributing to our economy.”

This particular part of the Offer in Compromise Program is scheduled to sunset on Jan. 1, 2018.

AB 525 will make permanent the Board of Equalization’s authority to operate the Program. If the provision were allowed to sunset, small businesses that face unanticipated taxes would be forced to pay their back taxes in full or be forced out of business.

Since 2009, the BOE has accepted compromises from 42 businesses that remain open today and continue to pay their sales and use taxes properly and on time – totaling an additional $14.3 million to the benefit of state and local governments.

“I am proud to partner with the BOE and Chairwoman Ma on this important legislation,” said Aguiar-Curry. “The Offer in Compromise Program has been proven to work.  Giving small businesses a second chance to meet their tax responsibilities and be successful not only saves jobs, but also helps our State fund important programs.  This is a great example of the creative way our Government can and should work.”

Cecilia Aguiar-Curry represents California’s Fourth Assembly District, which includes all of Colusa, Lake, Napa and Yolo counties, Dixon in Solano County and Rohnert in Sonoma County.