Sales Tax Allocation – Issues Identified, Fix TBD
May 12, 2016
As we reported last November, an audit of the Board of Equalization (BOE) found widespread issues with allocation of sales and use taxes as well as weaknesses in oversight and internal controls at the BOE. Of particular interest to counties, the audit revealed that counties had received an over-allocation of sales tax. It affects all accounts, including sales taxes related to Proposition 172, 1991 Realignment, 2011 Realignment, and local Bradley-Burns taxes. The BOE is currently working on a plan to correct these errors, which will be submitted to the State Controller later this month.
CSAC recognizes that this is a crucial revenue stream for counties, and that the timing of any corrective actions could have significant impacts as counties prepare budgets and cash flow plans. CSAC is working closely with the Department of Finance, State Controller’s Office, and Board of Equalization as a methodology to correct the misallocation is developed, and will continue to keep counties updated.