On June 27, 2017, California Governor Jerry Brown signed AB 102, the "Taxpayer Transparency and Fairness Act of 2017," to overhaul and significantly minimize the powers of the California State Board of Equalization (SBE). The new law relieves the SBE of its duties relating to the administration of many state taxes and fees, including the responsibility to hear appeals of personal income and corporate franchise and income tax matters. The SBE retains, however, its property tax authority under the California Constitution. Most of the SBE's non-Constitutional powers and responsibilities will be assumed by the newly created California Department of Tax and Fee Administration. The newly created California Office of Tax Appeals will assume responsibility for the SBE's administrative tax appeals function. For more on the changes contained in AB 102, see Tax Alert 2017-978.

It is not known at this time if appeals that have been filed with the current SBE and are fully briefed but not heard by the SBE before the end of the year will simply convert to the new tax appeals system or if new briefing will be required.

Even with the additional six months to staff and implement procedures for the new agencies, taxpayers can expect to experience delays in service. We will continue to monitor developments as they arise.