On Aug. 11, the California Assembly Appropriations Committee held a hearing on S.B. 972, a controversial bill that authorizes the disclosure of otherwise confidential taxpayer information.

S.B. 972 requires the Franchise Tax Board (FTB) to compile an annual list of all taxpayers, including combined reporting groups, subject to California’s Corporation Tax Law with gross receipts over $5 billion (less returns and allowances). The taxpayer list would contain the following information:

  • Taxpayer name;
  • Tax liability;
  • Taxable year for which the return was filed;
  • Total gross receipts for that taxable year; and,
  • The amount and types of credits claimed for that taxable year.

The bill requires the FTB to publish this information on or before April 1, 2021 and on or before April 1 every year thereafter.

According to the Appropriations Committee report published on Aug. 9 (PDF), the primary purpose of S.B. 972 is to provide public data so lawmakers can evaluate the effectiveness of the state’s tax credit and incentives programs, such as the Research and Development (R&D) Tax Credit. Specifically, the data will purportedly help lawmakers determine whether the R&D credit is used to create jobs or promote certain business activities. However, in an Aug. 10 written statement against the bill (PDF), the Council on State Taxation (COST) noted that policymakers already have access to the information covered by the bill on an aggregate basis to inform policy decisions. Accordingly, “the only rational basis for this “list” is to publicly shame large corporate taxpayers,” COST concluded.

A July 24 report from the Assembly Committee on Revenue and Taxation notes that many significant California business groups have already registered their opposition to S.B. 972, including:

  • Bay Area Council
  • Biocom
  • Calaveras County Taxpayers Association
  • California Bankers Association
  • California Business Properties Association
  • California Business Roundtable
  • California Cable & Telecommunications Association
  • California Chamber of Commerce
  • California Life Sciences Association
  • California Manufacturers and Technology Association
  • California Retailers Association
  • California Taxpayers Association
  • CompTIA
  • Council on State Taxation
  • Family Business Association of California
  • Inland Action
  • Kern County Taxpayers Association
  • Orange County Taxpayers Association
  • San Gabriel Valley Economic Partnership
  • Santa Maria Valley Chamber of Commerce
  • Silicon Valley Leadership Group
  • Solano County Taxpayers Association
  • Sutter County Taxpayers Association
  • TechNet
  • Western States Petroleum Association

After Tuesday’s hearing, S.B. 972 was placed in the suspense file. However, the bill may move out of committee as early as next week.