Deficiency Determinations

September 7, 2026 By Chris Micheli Leave a Comment

Deals with deficiency determinations under the California Sales and Use Tax Laws

Article 2 of Chapter 5 of Part 1 of Division 2 of the Revenue and Taxation Code deals with deficiency determinations under the California Sales and Use Tax Laws.

Section 6481 provides that, if the board is not satisfied with the return or returns of the tax or the amount of tax, or other amount, required to be paid to the state by any person, it may compute and determine the amount required to be paid upon the basis of the facts contained in the return or returns or upon the basis of any information within its possession or that may come into its possession.

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One or more deficiency determinations may be made of the amount due for one or for more than one period. When a business is discontinued, a determination may be made at any time thereafter, within the periods specified, as to liability arising out of that business, irrespective of whether the determination is issued prior to the due date of the liability.

Section 6482 provides that the amount of the determination, exclusive of penalties, is required to bear interest at the modified adjusted rate per month, or fraction thereof, from the last day of the month following the quarterly period for which the amount or any portion thereof should have been returned until the date of payment.

Section 6483 states that, in making a determination the board may offset overpayments for a period or periods, together with interest on the overpayments, against underpayments for another period or periods, against penalties, and against the interest on the underpayments. The interest on underpayments and overpayments is computed in the manner set forth in law.

Section 6484 states that, if any part of the deficiency for which a deficiency determination is made is due to negligence or intentional disregard of this part or authorized rules and regulations, a penalty of 10 per cent of the amount of the determination is added.

Section 6485 says that, if any part of the deficiency for which a deficiency determination is made is due to fraud or an intent to evade this part or authorized rules and regulations, a penalty of 25 percent of the amount of the determination is added.

Section 6485.1 provides that any purchaser of a vehicle, vessel, or aircraft who registers it outside the State of California for the purpose of evading the payment of taxes due under this part is liable for a penalty of 50 percent of any tax determined to be due on the sales price of the vehicle, vessel, or aircraft.

Section 6486 requires the department to give to the retailer or person storing, using, or consuming tangible personal property written notice of its determination. The notice is to be served in one of the three specified manners.

Section 6487 states that, except in the case of fraud, intent to evade this part or authorized rules and regulations, or failure to make a return, every notice of a deficiency determination can be served within three years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined or within three years after the return is filed, whichever period expires the later.

In the case of failure to make a return, every notice of determination must be served within eight years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined. For taxpayers filing returns on an annual basis, except in the case of fraud, intent to evade this part or authorized rules and regulations, or failure to make a return, every notice of a deficiency determination must be served within three years after the last day of the calendar month following the one-year period for which the amount is proposed to be determined.

Section 6487.05 explains that the period during which a deficiency determination may be served to a qualifying retailer is limited to three years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined. The term “qualifying retailer” is defined.

Section 6487.06 provides that the period during which a deficiency determination may be served to a qualifying purchaser is limited to three years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined. The term “qualifying purchaser” is defined.

If the department makes a determination that the purchaser’s failure to timely report or remit the taxes imposed by this part is due to reasonable cause or due to circumstances beyond the purchaser’s control, the purchaser may be relieved of any penalties imposed by this part. Any purchaser seeking relief from penalties imposed by this part is required to file a statement, signed under penalty of perjury, setting forth the facts that form the basis for the claim for relief.

Section 6487.07 allows a deficiency determination to be issued to a qualifying retailer only for those liabilities arising under this part for sales made. The term “qualifying retailer” is defined.

Section 6487.1 provides, in the case of a deficiency arising under this part during the lifetime of a decedent, a notice of deficiency determination is required to be served within four months after written request therefor, in the form required by the department, by the fiduciary of the estate or trust or by any other person liable for the tax or any portion thereof.

Section 6487.2 states that a notice of determination issued to an individual who was a general partner, as shown on the department’s records, and who, prior to the period covered by the determination, withdrew from the partnership, causing a change in ownership, and failed to notify the department, is to be served within four years after the last day of the calendar month following the quarterly period in which the change of ownership occurred.

An individual who was a general partner, as shown on the department’s records, who withdraws from a partnership without notifying the department of the change in ownership, is not liable for any unpaid, self-assessed liability of the partnership that becomes due at least three years after the last day of the calendar month following the quarterly period in which the change in ownership occurred.

Click here to read the full article in the California Globe

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How Will the History Books Remember the 911 Generation?

September 6, 2026 By Nick Busse 1 Comment

We do not need to relive tragedy to recover it

I wonder how the history books and the students in classrooms will remember my generation. The generation that watched the towers fall from a high school history class. The generation that took a moment of silence so heavy it trembled — and out of that trembling rose a fire, a desire, a passion for country that would one day lead them to fight for their nation. The generation that donned the fire suit and the badge, that carried the paramedic’s kit into the smoke, that stormed into disaster because that is simply what heroes do. They wore the same flag on their shoulder and swore the same quiet oath: we take care of our own.

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That was my question as I led myself along a copper wire to four IEDs buried under four culverts on Route Irish in Baghdad — the stretch of road so lethal it earned the title of the most dangerous in the world. And it is the same question I ask now. 

Will they remember us as the generation that gave some of its bravest, who put the needs of their country over their own, and the ones who paid the ultimate sacrifice in the name of life, liberty, and the pursuit of happiness? Because make no mistake — through every breath of uncertainty in that moment of terror on September 11, 2001, there still stood a nation built on resolve, resilience, courage, and a heartfelt desire to let the world know that America is the best place on earth, and nobody can take that away from us.

On that morning, nearly 3,000 people lost their lives. Among them were 343 New York City firefighters, 37 Port Authority officers, and 23 NYPD officers who climbed the stairs of collapsing towers while everyone else was running down. They ran toward the danger. In the months and years that followed, a generation of young Americans answered that same call — enlisting in record numbers, pinning on badges, pulling on turnout gear, and volunteering for a mission larger than themselves.

For a brief and beautiful moment, the country was one. Flags appeared on every porch and every overpass. Strangers gave blood, stood in line for hours, and grieved together. Republicans and Democrats stood on the Capitol steps and sang together. We did not ask each other how we voted. We asked each other how we could help. That is the America worth remembering — and worth teaching.

But here is the uncomfortable truth: a child born in 2001 is now old enough to have children of their own. To a classroom of teenagers today, September 11 is not a memory. It is a date in a textbook, a chapter that too often gets skimmed on the way to a final exam. And with each passing year, the moment when America truly united together slips further from living memory and closer to an afterthought.

That should concern all of us. Not because remembering makes us sad, but because remembering makes us strong. A nation that forgets what unites it will eventually forget how to unite at all. Over the last decade and a half, we have watched that unity fray. We have grown quick to divide and slow to stand shoulder to shoulder. The instinct that made us rush toward one another in 2001 has, somewhere along the way, gone quiet.

We do not need to relive tragedy to recover it. We need to teach it. Our schools once made room for the stories that built character — for the firefighter’s courage, the soldier’s sacrifice, the citizen’s duty. Somewhere, that common theme dissipated. It is time to bring it back, not as politics, but as heritage.

And perhaps something is already stirring. Across every branch, the Department of War made its recruiting mission early this year — several services hit their targets months ahead of the fiscal year’s close, the strongest showing in roughly fifteen years. Whatever narrative you believe about why, one thing is certain: more Americans are choosing to serve. The Department of War has made real changes to the quality of that service — better pay and housing, more domestic pathways to post-service success, and public-private partnerships that make the whole life cycle of service more attractive, alongside renewed pushes for domestic mineral mining and defense production. Regardless of which political aisle you sit on, more Americans are leaning into a renewed sense of pride. Something is in the air, and it smells like American spirit. Perhaps, in response to the descent of those refusing to embody it.  If things are truly starting to change, the surest way to build on it is a generation willing to carry it through.

Click here to read the full article in the California Globe

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‘The landscape has changed dramatically’: States defy the tech lobby on AI rules

September 5, 2026 By Brendan Bordelon Leave a Comment

State legislators are emboldened by rising public outrage, ineffective pushback from Washington and a surge of pro-regulation dollars — and tech lobbyists are throwing in the towel.

The tech industry’s effort to stop states from regulating artificial intelligence is on the verge of collapse, as legislators from across the country lose their fear of Silicon Valley.

Interviews with more than a dozen state lawmakers, tech representatives and AI regulation advocates revealed a defiant mood sweeping through statehouses. Legislators are increasingly ignoring warnings from the tech lobby and its Washington allies about an unworkable “patchwork” of conflicting laws — and are instead preparing bills to address the safety of advanced models, new AI auditing standards, chatbot protections for kids and the impact of data centers.

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Chinese Propaganda, Foreign Influence Campaign Against U.S. AI Data Centers

September 4, 2026 By Staff Leave a Comment

California already has 331 data centers, with 54 more planned

Data centers are the gigantic physical facilities that house the servers, storage, networking, and cooling systems that store, process, and move digital information. They support cloud computing, streaming, e-commerce, banking, AI, remote work, and most internet services. 

Data centers make online shopping possible, they make gaming and streaming possible, they keep our apps working, they make remote work possible, and they power Google.

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With Amazon building so many massive distribution centers across the country, it’s hard to tell if these gargantuan structures belong to Amazon, or if they are data centers – many of which have been in our communities for years.

The recent race to build more facilities is being driven in large part by Artificial Intelligence, but mainstream media and social media are fomenting distrust. And they have help.

China must be delighted with Americans’ opposition to data centers; it means their disinformation campaign is working.

OpenAI reported in June 2026 that it banned clusters of ChatGPT accounts likely originating in China (a private company working for provincial government clients), Politico reported.

Chinese state outlets CGTN, China Daily, Global Times, published English-language pieces and videos citing US electricity-price spikes and energy demand from data centers, sometimes using satellite imagery of specific U.S. sites. An Alethea analysis recorded hundreds of such mentions from Chinese, Russian, and Iranian state media in the first half of 2026, treating the issue as a “domestic fracture point.” Think-tank reports additionally link Neville Roy Singham’s Shanghai-based nonprofit network and the Party for Socialism and Liberation to on-the-ground organizing that contributed to moratoria or blocked projects totaling billions of dollars. These claims have prompted congressional letters requesting FBI investigation, Fox News reported. 

In mid-August, Sen. Bernie Sanders (I-Vt.) urged leading AI CEOs to pause AI development, warning that lawmakers will step in if no action is taken, Axios reported.

A report, “Foreign Influence in the Campaign against American AI,” by the Bitcoin Policy Institute think tank, alleges that there are “three vectors of foreign influence converging on the push to block U.S. AI data center construction.”

“Report documents CCP state media, a congressional-investigated nonprofit network, and foreign-billionaire dark money converging on the push to halt American AI data center construction, tracing a trail from Beijing’s state media apparatus through a CCP-aligned nonprofit network to foreign-billionaire dark money tied to the push for a federal moratorium on AI data centers.”

Fox reported on March 25, amid campaigns by Singham organizations against U.S. technology firms, Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez introduced the “AI Data Center Moratorium Act.” Weeks later, on April 29, Sanders hosted a Capitol Hill event titled “The Existential Threat of AI.”

According to the Bitcoin Policy Institute report, at that event, “Two of the four panelists were Chinese government affiliates and veteran PRC media voices, including Xue Lan, a Counsellor of the State Council of the People’s Republic of China, who called the U.S.-China AI race “an inaccurate narrative.” The event was held one month after Sanders introduced the moratorium legislation.”

According to the report, the two Chinese government panelists at that the Bernie Sanders event were Zeng Yi, founding dean of the Beijing Institute of AI Safety and Governance, and Xue Lan, a counselor of China’s State Council and chair of China’s National AI Governance Committee.

U.S. Sen. Dave McCormick (R-PA) says America needs to win the AI race, but has concerns about China’s interference.

On Aug. 27, McCormick shared a pair of reports on social media detailing an investigation led by Republicans into anti-data-center non-profits over their ties to China, Just the News reported.

“China knows the AI race will shape the future,” McCormick said. “Now we’re learning Chinese money may be funding groups working to stop the data centers America needs to compete and meet our growing demand for AI.”

“We cannot let the CCP sabotage American AI dominance from inside our own borders,” he added.

McCormick argued that China is trying to “manipulate America’s debate over AI and energy” because they want to see the United States lose.

California already has 331 data centers, with 54 more planned. California places 3rd among U.S. states by number of data centers, behind Virginia and Texas, according to Pew Research. Virginia has 685 data centers, and Texas has 466.  

Click here to read the full article in the California Globe

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Why a bill to juice condo construction died even though California lawmakers voted for it

September 3, 2026 By Ben Christopher 1 Comment

A bill that supporters hoped would kickstart California’s moribund condo industry and boost the scarce number of entry-level homeownership opportunities, died under mysterious circumstances at the stroke of midnight on Tuesday after failing to get a final vote before the end of the legislative session.

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Assembly Bill 1903 by Oakland Democratic lawmaker Buffy Wicks would have changed the way that disputes between homeowners and builders over purportedly shoddy construction are resolved in a way the bill’s author hoped would result in fewer defect lawsuits and less developer skittishness around building condos. .

Backed by real estate interests, “Yes In My Backyard” advocates and a bevy of city governments, the bill sailed through the Senate without objection on Monday after 11:15 p.m.

But in a legislative mystery with weighty implications for California’s dysfunctional housing market, it never made its way back to the Assembly. At midnight, the legislative session officially came to a close. The bill had already passed the Assembly the prior week. But lacking an obligatory “concurrence” vote needed to lock in the final amendments, the bill died quietly without facing a single “no” vote in either chamber.

In a statement released on Tuesday afternoon, Wicks said that she was “incredibly disappointed and frustrated” that the bill “was ultimately held by the Senate.”

“We put hundreds of hours, months of negotiations, and endless stakeholders engagement and coalition building,” she said. “Ultimately I had a bill Friday morning that I truly believe would have unlocked condo construction to serve our working class families desperate for homeownership opportunities.”

A spokesperson for Senate President Pro Tem Monique Limón, a Santa Barbara Democrat, did not respond to a request for comment.

The bill was closely watched by pro-development advocates, who championed it as a key to unlocking the type of naturally affordable for-sale construction that the state so desperately needs.

But the bill had been opposed throughout the year by the politically powerful Consumer Attorneys of California, a lobbying group representing civil trial lawyers, along with many homeowners associations. Both argued that the bill would make it unduly hard for homeowners to take irresponsible builders to court over legitimately defective construction.

Those groups stopped fighting the bill when Wicks agreed to water it down over the weekend. Stripping out language that would have specified the types of defects ripe for litigation and placed new restrictions on how defects can be identified, the final bill simply required homeowners to clearly document the defects before filing suit, to give the builder a chance to repair them first and, if those repairs were made complete, to absolve the builder of future liability.

Click here to read the full article in CalMatters

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California lawmakers race to pass bills before midnight deadline

September 2, 2026 By Ashley Zavala, Daniel Macht 2 Comments

SACRAMENTO, Calif. — California lawmakers on Monday are facing a midnight deadline to pass new laws as the state’s legislative session comes to an end, with a few exceptions scheduled for votes on Tuesday morning.

A massive last-minute spending bill and a separate proposal related to wildfire liability will be voted on Tuesday morning.

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Among the proposed laws being tracked:

  • AB 1896 would ban federal immigration officers from working as California state employees.
  • SB 493 would allow the governor to declare a state of emergency during international conflicts involving the federal government, enabling the state attorney general to crack down on price gouging. The bill specifically targets the oil industry.
  • Two proposals, AB 2383 and SB 886, aim to regulate data centers by creating new rules for their electricity use. These bills would also require the California Public Utilities Commission to set special rates for data centers to ensure costs are not shifted to general electricity customers.

These are just a few of the hundreds of bills California lawmakers have been working on this year.

Click here to read the full article at KCRA

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Gavin Newsom still doesn’t understand the limits of his power

September 1, 2026 By Daniel Kolkey Leave a Comment

After 7 1/2 years as governor, Gavin Newsom still does not understand the scope and limits of his gubernatorial powers.

On July 13, California Attorney General Rob Bonta sued to block Paramount Skydance’s acquisition of Warner Bros. Discovery. On August 1, The Wall Street Journal reported that Governor Newsom had expressed his view that blocking the deal would adversely impact employment in California and had encouraged the California Attorney General Bonta to reach a compromise out of court.

But according to the Journal, “Bonta has been adamant that he will fight the deal in court unless Paramount agrees to structural remedies,” and recently cancelled a meeting with Paramount scheduled for August 24 to discuss settlement.

But as governor, Newsom need not complain about the suit and act as an interested observer. Instead, he could have expressly directed the Attorney General not to bring the case, and subsequent to the suit, he could have directed him to settle it and specified the terms upon which settlement should be reached.

Article V of the California Constitution provides that “[t]he supreme executive power of this State is vested in the Governor,” and more specifically, it provides that “[s]ubject to the powers and duties of the Governor, the Attorney General shall be the chief law officer of the State.” This means that the Governor could have directed the Attorney General not to bring suit or the terms for settling it.

This reading of the state Constitution is not simply supported by its plain language, but is confirmed by the California Supreme Court’s decision in People ex rel. Deukmejian v. Brown. In that case, the California Supreme Court explained that “if a conflict between the Governor and the Attorney General develops over the faithful execution of the laws of this state, the Governor retains the ‘supreme executive power’ to determine the public interest; the Attorney General may act only ‘subject to the powers’ of the Governor.” Thus, Governor Newsom could have directed the Attorney General not to bring suit or to limit the remedies sought in the suit.

But he didn’t. He preferred leaking his views instead of leading.

His misunderstanding of his powers is not a new problem either. The California Constitution also provides, “The Governor shall see that the law is faithfully executed.” But he has failed to comply with that obligation in connection with the enforcement of the death penalty.

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Specifically, despite the fact that as recently as 2016, California voters rejected a ballot measure that would have repealed the death penalty, and instead approved Proposition 66, which retained the death penalty, Newsom issued an executive order within his first three months of taking office which has effectively become an eight-year “moratorium on the death penalty … in the form of a reprieve.”

A blanket moratorium on enforcing the death penalty on all criminal defendants, without regard to the strength of the evidence in any particular case or the trauma experienced by the victims, hardly satisfies the governor’s constitutional obligation to see that “the law is faithfully executed,” in this case, a death penalty law, enacted by the People through their initiative power, and upheld by the California Supreme Court.

Yes, the governor found a legal loophole since he has the authority to grant a reprieve under the California Constitution.   But this is ordinarily done on an individual basis. Yet, in this case, Newsom issued a reprieve to “all people sentenced to death in California,” regardless of the horrendous circumstances of any particular murder, the lost lives of innocent victims, or the California Supreme Court’s affirmance of the death penalty verdict in those cases.

Click here to read the full article in the OC Register

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What to know about the new California privacy law that became a flashpoint over free speech

August 31, 2026 By Lynn La Leave a Comment

Starting next year, Californians who provide legal aid, counseling or other types of assistance to immigrants will be eligible for a privacy program that keeps their addresses confidential and out of public records.

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Gov. Gavin Newsom approved this latest expansion of California’s Safe at Home program amid concern among Democratic legislators of a rise in reported harassment and threats against immigrants and immigration advocates.

Some Republican lawmakers fiercely opposed the measure, arguing that it stifles constitutional protections of a free press. The dispute came to a head last week in a verbal altercation involving Terry Schanz, the chief of staff of Democratic Assemblymember Tina McKinnor, and Nick Shirley, a conservative social media influencer and outspoken critic of the new law.

In a recording distributed widely on social media, Schanz confronted Shirley outside of the state Capitol and accused Shirley of having a small penis. Officials from the Assembly would not comment on whether Schanz could face discipline over the exchange.

The law goes into effect Oct. 1, 2027. Here’s what you need to know:

What does the privacy law do?

Under the new law — Assembly Bill 2624 — immigration support services providers, employees and volunteers can enroll in the state’s Safe at Home Program. The program lets participants, and family members in their households, keep their home addresses confidential and out of public records by providing an alternative mailing address through the California secretary of state. Participants can also vote confidentially.

The law also prohibits a “person, business, or association” from knowingly posting on the internet the address, image or personal information of program participants (as well as their spouse or child) with the intent to “incite a third person to cause imminent great bodily harm to those individuals.”

A person found in violation of the law could be fined $4,000 in civil damages.

Click here to read the full article in CalMatters

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California lawmakers strike wildfire deal that leaves out most of Newsom’s big demands

August 30, 2026 By Jeanne Kuang and Levi Sumagaysay Leave a Comment

Gov. Gavin Newsom on Saturday backed off his proposal to reduce costs for electrical utilities after their equipment sparks wildfires, agreeing instead to a narrower deal after homeowners, insurers and fire survivors argued his original plan would have shifted those costs onto them.

Instead, Newsom and Senate and Assembly leaders agreed on a narrower package of wildfire policies, including prohibiting private equity groups from investing in wildfire claims and denying utility CEO bonuses in the years their companies cause fatal fires.

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The deal is a victory for lawmakers who refused to reduce damages to victims and shift costs away from utilities. Opponents included insurance companies, consumer advocates and survivors of the January 2025 Eaton Fire caused by Southern California Edison equipment that killed 19 people in Altadena.

Under the agreement announced Saturday, the state would create a “fast-pay” program for survivors’ property loss, pain and suffering in the wake of a utility-caused fire. It would include deadlines for determining which claims are valid within 60 days of receipt, and settlement offers within 30 days after that, but survivors could still pursue the long process of suing utilities if they choose.

The state also commits to  improving its local wildfire mitigation efforts and sharing more data on insurance coverage in areas with fire risk.

The final agreement, which lawmakers will vote on next week in Senate Bill 492, caps a contentious series of closed-door negotiations between Newsom’s office and legislative leaders on how much utility companies should pay after fires.

Newsom wanted utilities to have to pay less to insurance companies, some wildfire survivors, local governments and corporations claiming damages after a fire. His administration is concerned the mounting costs threaten investor confidence in the state’s three major for-profit utilities: Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. He said that could lead to higher borrowing costs for the companies and higher electricity bills for Californians.

Newsom also argued his plan would prioritize paying survivors who lose their homes. In past fires, investors have funded lawsuits or claims have been sold to hedge funds, increasing the number of third parties seeking to profit from wildfire payouts, Newsom’s office has said.

Click here to read the full article in CalMatters

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Insurance executives warn that Newsom plan to shift utility wildfire liability would raise premiums

August 29, 2026 By Melody Petersen 1 Comment

Insurance company executives warned Gov. Gavin Newsom in a letter Wednesday that his plan to shift utility wildfire liability to property insurers would raise premiums across California.

“The party whose equipment ignites a catastrophic fire should bear the economic consequence of that fire,” the 15 executives wrote. “Shifting those costs to policyholders does not reduce the cost of electricity but does make homeownership more expensive and insurance coverage harder to find.”

As the legislative session nears its end, Newsom’s staff and lawmakers have been negotiating behind closed doors on a deal to limit utilities’ wildfire liabilities.

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According to a confidential document that Newsom’s staff sent to lawmakers and was obtained by Politico, the governor wants to stop property insurers from recouping their losses from homes destroyed in utility-sparked wildfires.

That could increase homeowners’ property insurance rates by as much as 50%, according to the Personal Insurance Federation of California. The highest hikes would be for those families living in severe fire risk areas.

“The proposal would shift billions of dollars in wildfire costs away from utilities and onto insurance consumers across the state, making coverage more expensive and harder to find,” said Denni Ritter at the American Property Casualty Insurance Assn.

Southern California Edison and the state’s two other big for-profit utilities have been lobbying Newsom and lawmakers to further shield them and their shareholders from wildfire liabilities ever since last year’s Eaton fire caused the price of their stock to tumble.

Government fire investigators said the fire, which killed 19 people and destroyed thousands of homes, was caused by electrical arcing on Edison’s out-of-service transmission line in Eaton Canyon. Edison kept the line in place despite not using it since 1971.

More than 11,000 households have filed suit against the utility, claiming it acted negligently, which the company denies.

Edison is offering settlements to victims of the Eaton fire. A $21-billion state wildfire fund that Newsom and lawmakers created in 2019 to protect the state’s three big utilities from bankruptcy after a fire is reimbursing Edison for its payments to victims.

At a news conference Wednesday, Newsom defended his plan, which also includes limiting the fees of attorneys in wildfire litigation and stopping hedge funds from profiting on the claims.

Newsom said that current law allows insurers to be paid before victims after a fire.

“The insurance industry is going to do everything to make sure they get paid first,” Newsom said.

Click here to read the full article in the LA Times

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