California Property Tax Glossary
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California Property Tax Glossary
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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Administrative Protest- An appeal filed by a taxpayer after the deadline for filing a normal appeal has passed or prior to issuance of a Notice of Determination or other notices of deficiency. The BOE is not required to accept such appeals, but if it does, the appeals are called administrative protests and they are reviewed as if they were timely petitions.
Annotations- Summaries of selected legal opinions issued by the BOE’s Legal Department which provide helpful guidance in applying applicable law and regulations but which do not have the force and effect of law.
A.P.N. or Parcel Number- An A.P.N. (“Assessor’s Parcel Number) is assigned to identify every parcel of real property in the County. The A.P.N. will appear on all correspondence received from the Assessor relating to that particular property parcel.
Appeal, Application or Petition- A completed “Application For Changed Assessment” form filed with the Clerk of the Board.
Appeal Number, Application Number or Petition Number- The number assigned to an “Application for Changed Assessment” form once it has been filed with the Clerk of the Board. This reference number will appear on all correspondence from the Clerk relating to that appeal.
Applicant Petitioner- A taxpayer who has filed an “Application for Changed Assessment” form with the Clerk of the Board.
Assessee- The person to whom property or a tax is assessed.
Assessed Value- Property value established by the County Assessor using various appraisal techniques and/or methods.
Assessment Appeal- A hearing before an Assessment Appeals Board or Hearing Officer where a taxpayer can protest the amount of the assessed value of his property.
Assessor- The County Officer who has the constitutional duty to assess all County property subject to taxation.
Affidavit- A person’s written statement on a BOE form or other document that the person certifies to be true and correct.
Appeal A process that enables taxpayers to contest a proposed liability or refund for taxes or fees. See also Administrative Protest in the Business Taxes section.
Appeal Letter- A written statement from the taxpayer to the BOE sent after the taxpayer has exhausted all administrative appeal rights with the FTB. The purpose of the letter is to explain the taxpayer’s disagreement with the FTB and why the taxpayer believes that the FTB is incorrect. See Regulation 5420, Appeal Filing Requirements. See also Notice of Action.
Appeals Conference- A meeting with an impartial Appeals Division staff member during which the taxpayer and representatives from the responsible unit of the BOE present their respective positions regarding a contested assessment or claim for refund.
Appraisal Date- The moment in time for which a valuation is prepared.
Assessee- The person who owns, claims, possesses, or controls the property on the lien date. R&T Code Section 23.
Assessee Name- The name of the person or corporation shown on the most currently updated version of a designated roll.
Assessment Appeal- A formal procedure to dispute the value placed on taxable property.
Assessment Appeals Board- A three-member Board appointed by the Board of Supervisors to preside over and decide assessment appeals.
Assessment Appeals Hearing Officer- An individual appointed by the Board of Supervisors to determine the validity of the value placed on a parcel or unsecured bill.
Assessment Date- See “Lien Date”.
Assessment Roll- A listing of all taxable property with their respective values, within a county.
Assessment Year- The period beginning with the lien date and ending immediately prior to the succeeding lien date for taxes levied by the same agency. R&T Code Section 118.
Assessor Parcel Map- Assessor parcel maps reflect the legal boundaries and dimensions of each parcel, and serve as the basis for land value assessments.
Audit- 1) A means of collecting data relevant to the determination of taxability, situs, and value of property. R&T Code Section 469. 2) A review of taxpayer records by a BOE auditor to determine if taxes or fees have been reported correctly.
Audit Issue Presentation Sheet- A report prepared for each audit issue that includes a discussion of the facts, relevant law, and proposed adjustment. The sheet is given to taxpayers during and after the conclusion of their audits.
Audit Period- The tax period for which a taxpayer’s records will be reviewed in an audit.
Audit Report- A written report issued when an audit is completed. This report explains the auditor’s findings and the reasons for any changes in the amount of a tax or fee due (debit or credit).
Auto Pay- Automatic debits from a taxpayer’s bank account for payments required under a voluntary installment payment agreement.
B
Bankruptcy- A federal legal process that enables insolvent debtors to either eliminate some or all of their debts or to work out a payment plan to pay a portion (or all) of their debts over time.
Base Year Value- 1) The Base Year Value of property that has not changed ownership or been newly constructed since 1975 is the fair market value on the 1975 lien date. The Base Year Value of property that has been purchased, newly constructed or changed ownership since the 1975 lien date is the market value on the date on which the purchase or change in ownership occurs, or the date on which new construction is completed. R&T Code Section 110.1. 2) The full cash value (market value) of property on the date it changed ownership, or the full cash value of newly constructed property on the date construction was completed.
BIN (Business Identification Number)- A distinct and private identification code used for e-filing Business Property Statements without which online access will not be possible. A new number is generated and sent to business filers every year. (Access Code). BOE See “State Board of Equalization”
Board Decision- A decision made by the Board Members, in public, at a Board Meeting. (A quorum of at least three of the five Board Members must be present for the Board to take any action, including hearing or deciding an appeal.)
Board Hearing- A public meeting where the taxpayer and BOE staff (or FTB staff, if applicable) each have the opportunity to present oral arguments about unresolved tax or fee disputes.
Board Hearing Summary- A written document prepared for the Board Members by the Appeals Division which summarizes the remaining disputed issues to be considered during the oral hearing.
Board of Equalization (BOE)- The California state agency that administers sales and use taxes, property taxes, and special taxes and fees, and that hears personal income and corporate franchise tax appeals from actions of the FTB.
Board Member- The BOE consists of five Board Members, each serving a four-year term. Four Board Members are elected from California’s four geographical equalization districts and the fifth is the State Controller, who is elected on a statewide basis and serves as a Board Member in an ex-officio capacity.
Book Value- Capitalized cost less depreciation as estimated by an accountant.
Briefing- The process of providing information to the BOE in an income tax appeal. Briefs are written statements filed by the taxpayer and the FTB. They may include evidence, explanations, and legal arguments. They must be filed by certain deadlines. See also Extension.
Building Improvements- Usually means the betterment of real property by the addition of a structure(s) or the addition of additional capacity to an existing structure.
Business Description- A general classification specifying the type of trade a business is engaged in, such as manufacturing, retailer, wholesaler, or professional services.
Business Property- All assessable items of tangible personal property and fixtures that are owned, claimed, possessed, controlled or managed in a trade, business or profession. (See Property Tax Rule 123 of the California Code of Regulations.)
Business Property Statement (Form BOE-571-L)- A State Board of Equalization (BOE) prescribed form businesses use to report costs and other related information to their local county Assessor.
Burden of Proof- The person who has the “burden of proof” is the person who must provide evidence and explanations to the BOE in order to win an appeal. Generally, the taxpayer has the burden of proof under California law, but there are situations where the BOE or the FTB has the burden of proof, such as when they are alleging that a taxpayer committed fraud.
C
Calamity Assessment- When a taxable property is damaged or destroyed due to no fault of the assessee and consequently, the property’s taxable value can be decreased by reassessment.
Calamity Reassessment- A reassessment made when there is damage of over $10,000 to any taxable property caused by fire, wind, or water, without the fault of the owner.
Certificate of Tax Clearance- A document issued by the BOE in connection with the sale of a business or stock of goods if, after receiving a written request for the certificate, the BOE determines that the business does not have a tax or fee liability. When the BOE issues the requested certificate, the purchaser of the business for which it was issued will not be subject to “successor liability” even if it is later determined that the predecessor business did, in fact, have a tax or fee liability.
Change in Ownership- The transfer of a present interest in property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest. R&T Code Section 60 et seq.
Change in Ownership Statement (COS)- State law requires that a Preliminary Change of Ownership Report (PCOR) be filed with every document evidencing a change in the title or ownership of real estate when the document is recorded. If a document that evidences a change in title is recorded without a PCOR, the Assessor will send the new owner a Change of Ownership Statement (COS). The new owner is responsible for filing a completed COS. Penalties for not filing range from $100 to $2,500 and will result in an additional tax bill.
Church Exemption- A type of exemption for property operated (but not necessarily owned) by a church that requires annual filing.
Claim for Refund- A written claim that states a tax or fee has been overpaid. It outlines specific grounds for the claim and seeks a refund of the claimed over payment. The limitations for filing a claim may depend on a number of factors, including the date the disputed amount was paid, the filing date of the return reporting the claimed overpaid amount, or the date of a BOE determination that includes a claimed over payment. For more details on time limitations for filing claims for refund, see publication 117, Filing a Claim for Refund and Regulation 5231, Limitation Period for Claim for Refund.
Claimant- A taxpayer who files a claim for refund.
Clerk of the Board- Clerk of the Board of Supervisors, who serves as Clerk of the Assessment Appeals Board. The Clerk of the Board is responsible for setting all cases before the Assessment Appeals Boards and Hearing Officers, then notifying taxpayers and the Assessor of scheduled assessment appeals.
Collection Cost Reimbursement- A fee imposed on past due liabilities that is intended to cover the BOE’s costs of collecting those past due liabilities.
Combination- When two or more parcels are combined into one parcel.
Commercial/Industrial or Business Property- Property used for commercial purposes, i.e., the buying or selling of goods or services, and not for dwelling purposes.
Common Area- Land and improvements within a lot, parcel, or area for the beneficial use and enjoyment of all owners. The common area may be held by owners of lots or residential units as an undivided interest, owned in its entirety by a homeowners’ association, or a combination of both.
Comparable Sales _ Comps- Comparable Sales “Comps” are the most common type of evidence used in residential appeals. They represent actual sales of similar types of properties. (See Preparing for an Appeals Hearing brochure for more information.)
Completion Date- The completion date of construction as reported by an agency or city or determined by an Deputy Assessor.
Computer-Assisted Audit- An audit based on an examination of the electronic records of the taxpayer.
Conditional Sale Contract- A form of sales contract in which the seller reserves the title until the buyer pays for goods or land, at which time title passes. Also known as a financing lease.
Condominium– The composite of individual ownership and exclusive possession of airspace in a multi-unit building with collective ownership in, and rights of possession to, common facilities.
Contribution Disclosure Form- A form that must be filed before a taxpayer’s hearing by the taxpayer (and by any agent of the taxpayer or other hearing participant, as defined by regulation) to report contributions made to any Board Member during the 12 months prior to the hearing or decision on the taxpayer’s appeal.
D
dba “Doing Business As”- A (fictitious) name given to the business that is separate and apart from the ownership name.
Decision and Recommendation (D&R)- Document prepared by Appeals Division staff after completion of the appeals conference process. The D&R summarizes the positions of the taxpayer and BOE staff on the disputed issues and provides the factual findings, analysis, and conclusions and recommendations of the Appeals Division with respect to those issues.
Deed of Trust- A written instrument by which a borrower (trustor or owner) conveys an estate in real property to another (trustee) for the benefit of the lender (beneficiary) as security for the repayment of a money. In the event the trustor fails to repay the debt, the trustee conducts a foreclosure sale of the real property.
Deferral- A written request to postpone a hearing for a specified period of time. A deferral may be requested by the taxpayer, the FTB, a Board member, or the BOE’s Appeals Division staff.
Deficiency Assessment- The generic term of a billing for tax or fee issued by the BOE to a taxpayer. The most common name for a deficiency assessment issued by the BOE is a Notice of Determination.
Disabled Veterans’ Exemption- An exemption for a qualified veteran who has a 100% disease or injury-services connected disability. The exemption amount changes annually, and in 2011 up to $116,845 of a qualified veteran’s primary residence from taxation, with no income limitation; or up to $175,269 with a household income limit of $52,470.
Documentary Evidence- A type of written proof that is offered to establish the existence or nonexistence of a fact that is in dispute.
Dual Determination- A deficiency assessment issued to a person other than the person who incurred the primary liability for the subject tax or fee. For example, under certain circumstances, a purchaser of a business or stock of goods may become liable for what is known as “successor liability,” up to the purchase price, for the tax or fee liability incurred by the seller of the business. If this happens, the BOE issues the purchaser a Notice of Successor Liability. The seller of the business who incurred the tax or fee liability remains liable for the liability it incurred, and the Notice of Successor Liability issued to the purchaser is a “dual” determination. (While two persons are billed for the same liability, the BOE will collect the liability only once.)
E
e-File- An electronic record created, generated, sent, communicated, received or stored by electronic means through a Web-site.
e-Filing- A web-based application that will allow users to view, modify, and submit filings on-line.
Easement- Created for a specific purpose, an easement is the right, privilege, or intention that one party has in the land of another.
Economic Unit- A parcel which is not saleable in and of itself, because it is part of a larger unit and contiguous-owned parcels.
Electronic Signature- An electronic symbol or process logically associated with an electronic record and executed by a person with the intent and full knowledge that the electronic signature constitutes a valid certification of the electronic record.
Eminent Domain- The right of the government to acquire property for necessary public or quasi-public use by condemnation. An owner must be fairly compensated.
Equitable Relief- See Innocent Spouse or Registered Domestic Partner Relief
Escape Assessment- 1) An assessment to increase the roll value for a previous year when a property is under assessed or misses assessment. R&T Code Section 531. 2)An assessment made outside the “regular” assessment period to correct for property that was undervalued or not valued at all during the regular assessment period. (See “Regular Assessment” definition below.)
Exemption Certificate- A document issued by a purchaser to its seller certifying that the property purchased according to the certificate will be used in a manner or for a purpose entitling the seller to regard the sale as exempt from tax.
Exhibits- Written evidence submitted for presentation at a hearing, such as sworn statements or document photocopies.
Exit Conference- A conference held at the conclusion of an audit so that staff can explain the results of the audit to the taxpayer (for instance, the tax was underpaid, the tax was overpaid, or the correct amount of tax was paid).
Extension- A written request for more time to submit a brief. See also Briefing.
F
Factored Base Year Value (FBYV)- This is the Base Year Value, plus the value of any assessable new construction, plus an annual inflation factor of no more than 2% per year. Factored Base Year Value represents the maximum value allowed under Proposition 13.
Fair Market Value (Market Value)- The amount of cash or its equivalent that a property would bring if exposed for sale in the open market. Also known as Full Cash Value. R&T Code Section 110.
Final Order of Condemnation- A judicial order transferring either an easement or fee title to a plaintiff for property condemned under eminent domain proceedings.
Finality Penalty- A penalty imposed if the taxpayer does not pay a deficiency assessment before it becomes final.
Fiscal Year- A period of time for accounting/taxing purposes.
Fixture- 1) A “fixture” is an item of personal property classified as realty for property tax purposes because it is physically annexed to land or buildings used for a business or profession. 2)An item of tangible property which is classified as real property for assessment purposes because it is physically or constructively annexed to real property with the intent that it remain annexed indefinitely. Property Tax Rule 122.5.
Franchise Tax Board (FTB)- The California state agency that administers California’s personal income tax and corporation franchise tax.
Full Cash Value- The amount of cash, or its equivalent, that property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller can take advantage of the exigencies of the other, and with both buyer and selling having knowledge of all uses and purposes to which the property is capable of being used, together with any enforceable restrictions on that use. R&T Code Section 110.
Full Economic Cost- Cost for appraisal purposes. Includes all market costs (direct and indirect) necessary to purchase or construct real or personal property and make it ready for its intended use.
G
Grant Deed- A written instrument that transfers title to real property.
Grantee (Buyer)- A person who acquires title to real property.
Grantor (Seller)- A person who makes a transfer of title to real estate.
H
Hearing Request- A written request for an oral Board hearing. (The request can be made when the taxpayer first files the appeal or later as specified by applicable regulations.)
Hearing Summary- A written document summarizing the facts, contentions, law and evidence of an appeal prepared by independent BOE attorneys in preparation for an oral hearing before the Board Members. The hearing summary is sent to the parties and the Board Members prior to an oral hearing at the BOE, and is intended to assist the Board Members in their consideration of the appeal at an oral hearing
Historical Cost- The total cost of a property when it was originally purchased.
Historical Property- A property that is encumbered by a “Historical Properties Contract” between the owner and a governmental jurisdiction may be entitled to beneficial property tax treatment under Revenue & Taxation Code sections 439-439.4 (also known as the Mills Act). Properties assessed under the Mills Act typically see a reduction in property taxes ranging from 15% to 60%. It is important to understand that a property’s mere presence on a Register of Historical Properties does not, in itself, quality the property for Mills Act treatment because the property must also be encumbered by a historical property contract, as specified by law.
Homeowner and Renter Assistance- Homeowners who are blind, disabled or 62 years or older and meet income restrictions may qualify for this program administered by the State of California.
Homeowners’ Exemption- An exemption that reduces the assessed value of real or personal property by $7,000. The property must be owned and occupied by the person applying for the exemption.
I
Improvement- All buildings, structures, fixtures, and fences erected on or affixed to the land.
Innocent Joint Filer Relief- A form of equitable relief authorized by the Revenue and Taxation Code under which the FTB may grant the claim for relief from joint liability by a spouse or registered domestic partner for certain taxes attributable to the claimant’s spouse or registered domestic partner when the applicable statutory requirements are met.
Innocent Spouse or Registered Domestic Partner Relief- A form of equitable relief authorized by the Revenue and Taxation Code under which the BOE may grant the claim for relief from joint liability by a spouse or registered domestic partner for certain taxes and fees attributable to the claimant’s spouse or registered domestic partner when the applicable statutory requirements are met.
Institutional Exemption- A category of exemptions including church, religious, welfare, and college exemptions.
Interest- A charge required by statute that accrues each month on unpaid taxes and fees.
Inventory Items of personal property that become part of a product or are themselves a product that are held for sale or lease in the ordinary course of business.
J
Jurisdiction- The determination as to whether the BOE has the legal right to hear an income tax appeal, or a particular issue raised by an appeal. The BOE’s jurisdiction in income tax matters is limited by law. For example, the BOE can determine the correct amount of income tax due, but it cannot require the FTB to hold another protest hearing or apologize for making a mistake.
L
Land- Real estate or real property, except improvements
Late Payment Penalty- A penalty imposed when a taxpayer fails to pay a tax or fee when due. The penalty is generally 6% or 10% of the unpaid amount. For more information, see publication 75, Interest and Penalties.
Lease- A contract between an owner and tenant for the possession of real property that sets forth conditions for occupancy, use, and duration of the tenancy.
Lease Purchase Option Equipment- Equipment acquired via a lease purchase option in which the final payment, if made, transfers title to the lessee.
Leasehold Improvements- Improvements made by the lessee/tenant.
Legal Description- A description of real property sufficient to locate it on the ground by reference to government surveys or approved recorded maps.
Lessee- One who has the right to use or occupy property under a lease agreement.
Lessor- One who conveys the right to use and/or occupy property under a lease agreement.
Letter Decision- A written decision prepared by the BOE’s Appeals Division that contains a short explanation of the reasons for the BOE’s decision on an appeal. A Letter Decision may be issued when the Board Members decide an appeal without adopting a Summary Decision or a formal opinion, and is frequently issued following an oral hearing.
Levy- The actual seizure of property, including money, to satisfy a collectible debt. A levy on wages is also referred to as a wage garnishment.
Lien- A legal encumbrance against real or personal property to secure payment of a debt.
Lien Date- 1) 12:01 a.m. on January 1 preceding the fiscal year for which taxes are collected. Also, the time when taxes for any fiscal year become a lien on property. 2) The date when taxes for any fiscal year become a lien on property. (Currently 12:01 a.m. January 1 of each year.) R&T Code Section 117.
Lifted Improvements- Buildings owned by someone other than the owner of the land and billed on a separate tax bill.
M
Market Value or Taxable Market Value- Is the taxable value of your property. At time of purchase it is usually your sales price. However, if your property was obtained as the result of a foreclosure, REO, auction, probate, etc. it may not be the taxable market value enrolled by the Assessor.
Mello-Roos- A comprehensive regional government financing and administrative system established by local governments at the request of a developer to finance specific public facilities and services such as schools, roads and libraries. Mello-Roos payments are billed as a separate charge on the property tax bill.
N
New Construction- Any addition to real property, whether land or improvements (including fixtures) since the last lien date. In addition, any alteration of land or improvements (including fixtures) since the last lien date which constitutes a major rehabilitation or converts the property to a different use. R&T Code Section 70 & 73.
New Construction Letters- A self-reporting letter completed by an assessee with new construction information.
Notice of Action (NOA)- A written response from the FTB setting forth its determination following a taxpayer’s protest. The notice will typically note that taxpayers must timely appeal the NOA to the BOE if they do not agree with the amounts listed on the NOA and they want BOE to decide an appeal.
Notice of Appeals Conference- Written notice of the time, date, and location of an appeals conference.
Notice of Board Hearing- A notice sent to inform a taxpayer of the scheduled date of the Board hearing on the taxpayer’s appeal, generally sent at least 75 days before the hearing date.
Notice of Denial of Claim for Refund- A notice issued to inform the taxpayer that its claim for refund has been denied.
Notice of Determination- A notice issued by the BOE to a taxpayer to assess a tax or fee liability and any applicable penalties. (The assessed liability generally becomes final 30 days after issuance if the taxpayer does not file a petition for redetermination appealing the assessment within 30 days of issuance.)
Notice of Jeopardy Determination- A notice issued by the BOE to a taxpayer to assess a tax or fee liability and any applicable penalties that is immediately due and payable. The BOE issues this type of billing when it believes that collection of a liability would be jeopardized by delay.
Notice of Levy- A notice issued to a person holding money or property of a taxpayer owing amounts to the BOE to levy that money or property to satisfy the debt of the taxpayer to the BOE. The person to whom the Notice of Levy is issued must turn over to the BOE the money or property of the taxpayer held by the person, up to the amount of the debt owed by the taxpayer to the BOE. The taxpayer receives a copy of this notice.
Notice of Proposed Assessment (NPA)- A written notice from the FTB informing a taxpayer that it made audit adjustments to a taxpayer’s account for a specified tax year. If a taxpayer disagrees with the proposed assessment, the taxpayer must file a timely protest with the FTB. If a timely protest is not filed, the assessment will become final and the FTB will bill the taxpayer for the amount due, including penalties and interest
Notice of Reconsideration- A notice issued by the BOE setting forth the BOE’s decision on a petition for reconsideration of successor liability, specifying the liability, if any, owed by the person filing the petition.
Notice of Redetermination- A notice issued by the BOE setting forth the BOE’s decision on a petition for redetermination, specifying the liability, if any, owed by the person filing the petition.
Notice of Refund- A notice issued to the taxpayer by the BOE stating that some or all of the taxpayer’s claim for refund has been granted.
Notice of Successor Liability- A notice issued by the BOE to the purchaser of a business or stock of goods to assess that purchaser for the unpaid liability due from the seller to the BOE, up to the purchase price of the business or stock of goods. A purchaser served with a notice of successor liability may file a petition for reconsideration of the liability. See publication 17, Appeals Procedures or regulation 1702R, Successor’s Liability.
O
Offer in Compromise- With respect to a final liability, a proposal by a taxpayer to pay less than the final amount of taxes or fees due.
Oral Hearing- The opportunity for taxpayers or representatives to personally appear before the Board Members during a Board Meeting and present oral arguments regarding issues of fact and law relevant to the taxpayer’s matter.
Ownership Type A description of ownership type as provided by the Assessee, including proprietorship, partnership, corporation or business trust.
P
Parcel Map- Not to be confused with the Assessor’s Parcel Map, this recorded map is used to illustrate a division of land or commonly-known “lot split.” It does not constitute a tract, and it is restricted to the breakup of not more than four residential parcels.
Penalty Assessment- A penalty for failure to file a Business Property Statement with the Assessor within the prescribed time. The penalty is equal to 10% of the assessed value of the unreported property.
Penalty Assessment- Assessment imposed for failure to file an annual property statement for personal property or failure to file a change of ownership statement reflecting a change in ownership of real property or a mobile home. This assessment is in addition to your normal property tax assessment.
Perfecting an Appeal or Petition for Rehearing- Submission of substantially all information needed for the BOE to accept an income tax appeal. The BOE has the discretion to accept a taxpayer’s appeal even if the appeal letter is missing some necessary information; when this happens, the taxpayer may be given an opportunity to supply the missing information so that the appeal can proceed.
Person Affected- One who owns an interest in property which is the subject of an assessment appeal proceeding.
Personal Property- 1) All tangible property except real property (real estate). 2) Tangible property owned, claimed, possessed or controlled in the conduct of a profession, trade or business which may be subject to property taxes.
Petition, Appeal or Application- See Appeal.
Petition for Reconsideration- A written appeal filed by a taxpayer to request that the BOE reconsider a liability assessed by a Notice of Successor Liability.
8 Glossary of Terms
Petition for Redetermination- A written appeal filed by a taxpayer to request that the BOE reconsider a deficiency assessed by a Notice of Determination or a Notice of Deficiency Assessment. Petitions for redetermination that are filed before issuance of notices of determination or other deficiency notices are not valid petitions. However, they may be accepted as an administrative protest. See also Administrative Protest.
Petition for Rehearing- A request for reconsideration after the BOE’s determination of an appeal. The petition must be filed within 30 days of the date of the Board’s decision and must identify grounds for a rehearing, such as newly discovered evidence. See also Board Decision.
Petition Number, Appeal Number or “Application Number- See Appeal Number.
Petitioner or Applicant- See Applicant.
Petitioner- A taxpayer who files a petition for reconsideration or petition for redetermination is called a “petitioner” for purposes of that appeal.
Possessory Interest- An assessable right for the private use of tax-exempt land, (property owned by a government agency that is used by a private party(ies)). These interests are typically found where individuals, organizations, or companies lease, rent or use real estate owned by federal state or local government agencies.
Preliminary Change of Ownership Statement (PCOR)- A form that is completed by a transferee (buyer) and filed concurrently with a Recorded Document evidencing a change in ownership. If this form is not filed at the time of recording, a fee of $20.00 is charged. This form is identical to the Change in Ownership Statement and provides the Assessor Department with information about the transfer.
Privacy Notice- A notice sent to taxpayers and their representatives notifying them about information provided during the appeals process that may be disclosed to the public or other government agencies.
Property- Property includes all matters and things, tangible and intangible, real estate and personal property that are capable of private ownership. The Assessor assesses real estate (land and improvements), and taxable personal property.
Property Tax Postponement- Homeowners who are blind, disabled or 62 years or older and meet income restrictions may qualify for this program administered by the State of California.
Proposition 8- Proposition 8 amended Proposition 13 to provide for declines in value. Prop. 8 requires the Assessor to enroll the lower of either: (1) the Factored Base Year Value, or (2) the market value as of the annual lien date Jan. 1. Prop. 8 reductions in value are temporary.
Proposition 13- Limits the property tax rate to 1 percent plus voter-approved bonded indebtedness, and defines taxable value as the lower of the property’s Factored Base Year Value (FBYV) or market value on lien date, January 1. Factored Base Year Value is the market value of the property when it was acquired by the current owner, plus the value of any new construction, plus an inflation factor of no more than 2% per year. Taxable value can increase more than 2% in one year if the property experiences a change in ownership, new construction or received temporary reduction(s) in taxable value in prior tax year(s).
Proposition 58 Real estate that is transferred from parent(s) to child(ren), or from child(ren) to parent(s) may be excluded from reassessment, subject to certain value limitations.
Proposition 60- A one-time provision that allows a homeowner 55 years of age or older, who meets other filing requirements, to transfer the base-year value of his/her home to a replacement property in the same county.
Proposition 90- A one-time provision that allows a homeowner 55 years of age or older, who meets other filing requirements, to transfer the base-year value of his/her home to a replacement property in a different county. The county Board of Supervisors where the replacement property is purchased must have enacted a Prop. 90 ordinance to allow the transfer of base-year value to that county.
Proposition 110 Allows a severely and permanently disabled person to transfer the base year value of his/her property to a replacement property. Also exempts from reassessment new construction completed for the purpose of making a structure more accessible for a severely and permanently disabled person.
Proposition 193- Real estate that is transferred from grandparent(s) to grandchild(ren), may be excluded from reassessment, subject to certain value limitations. In order to qualify, all parents of the grandchild must be deceased as of the date of transfer.
Q
Quitclaim Deed- An instrument that passes whatever title a grantor has at the time a transaction is consummated to a designated grantee. If the grantor acquires a better title at a later date, it is not passed on to the grantee, and it carries no warranties on the part of the grantor.
R
RCLND- A method used by the Assessor to value business personal property. It is the cost to replace an existing property with a property of equivalent utility minus normal depreciation. (Replacement Cost Less Normal Depreciation.)
R&T Code (Revenue and Taxation Code)- The body of statutory law that governs property assessment and property taxation procedures and practices.
Real Property- 1) Land, improvements, all mines, minerals, and quarries in the land and all standing timber. 2) The possession of, claim to, ownership of, or right to the possession of land; all mines, minerals and quarries in the land; and improvements to land.
Reassessment- The establishment of a new Base Year Value for property, equal to its Full Cash Value when it changes ownership in accordance with Prop. 13. Certain changes in ownership are specifically excluded from reassessment.
Reaudit- A further review of the records of a taxpayer after a Notice of Determination has been issued.
Reaudit Report- Where a re-audit results in an adjustment to the tax, fees, or penalties, a re-audit report is issued to reflect and explain those adjustments.
Recorded Document- Any written instrument or judgment affecting the title or possession of real property submitted to the County Recorder and made of record by that office; includes Grant Deeds, Quitclaim Deeds, leases, contracts, and court decrees.
Redevelopment- An activity carried out by a city or county government to bring about new development in blighted urban areas.
Regular Assessment- An assessment issued during the “regular” assessment period. (See below.)
Regular Assessment Period- The regular assessment period is from January 1 through July 1.
Religious Exemption- A type of exemption for church-owned property that requires a “one-time filing.”
Replacement Cost- The cost to replace an existing property with a property of equivalent utility.
Request for Disclosure Statement- A form mailed to all taxpayers and representatives who are going to appear before the Board Members at a Board hearing. The form enables taxpayers and representatives to disclose, on the record, any contributions totaling $250 or more that were made within the last 12 months to any of the Members of the Board. The forms are to be completed and returned as soon as possible. See also Contribution Disclosure Form.
Request for Relief of Penalty- A taxpayer may seek relief of a late filing penalty or a late payment penalty by submitting a written statement setting forth the facts on which it bases its claim for relief, signed under penalty of perjury. (The BOE has prepared a form that can be used for this purpose, BOE-735, Request for Relief from Penalty.) The BOE can grant the requested relief if it finds that the taxpayer’s failure to file a timely return or make a timely payment was due to reasonable cause and circumstances beyond the control of the taxpayer, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect.
Resale Certificate- A document issued by a purchaser to its seller certifying that the purchase is for resale in the regular course of the purchaser’s business.
Residential Property- Property in which persons live or dwell and which is not used for commercial purposes.
Respondent- A term referring to the FTB and, where appropriate, authorized representatives of the FTB in the context of appeals from the FTB to the BOE. (See Regulation 5411, Appeals from Actions of the Franchise Tax Board).
Respondent’s Contentions- The FTB’s factual and legal reasons for recommending that the Board Members deny an appeal in whole or in part are referred to as the “respondent’s contentions.”
Response to Notice of Appeals Conference- A form sent with the Notice of Appeals Conference that the taxpayer should complete and return within 15 days to confirm the date, time, and location of the scheduled appeals conference.
Response to Notice of Board Hearing- A form included with the Notice of Hearing that the taxpayer must complete and return within 15 days to confirm that the taxpayer will attend the hearing.
Responsible Person- Any officer, member, manager, employee, director, shareholder, partner, or other person having control or supervision of, or who is charged with the responsibility for, the filing of returns or the payment of tax or who has a duty to act for a corporation, partnership, limited partnership, limited liability partnership, or limited liability company in complying with any provision of the Sales and Use Tax Law. See Regulation 1702.5, Responsible Person Liability.
Responsible Person Liability- Any responsible person who willfully does not pay tax, or who is the cause of the nonpayment of any sales or use taxes due from a corporation, partnership, limited partnership, limited liability partnership, or limited liability company, under specific circumstances, shall be personally liable for such taxes and interest and penalties on those taxes, not paid upon the termination, dissolution, or abandonment of the business of the corporation, partnership, limited partnership, limited liability partnership, or limited liability company. This personal liability is referred to as a “responsible person liability.” See Regulation 1702.5, Responsible Person Liability.
Revised Audit- A further review of taxpayer records after the original audit is performed and before the issuance of a Notice of Determination.
Revised Audit Report- Where a revised audit results in an adjustment to the tax, fees, or penalties, a revised report is issued to reflect and explain those adjustments.
Revocation of Permit or License- An action that may be taken whenever any permit or license holder fails to comply with the applicable provisions of law.
Rules for Tax Appeals- The BOE regulations governing the administrative review process for all BOE-administered tax and fee programs as well as the BOE’s review of appeals from the FTB, officially cited as California Code of Regulations, Title 18, sections 5000-5605 (available on the BOE website).
S
SBE- See “State Board of Equalization”.
Sales Tax- 1) This is an element of cost for acquiring items. Sales tax is also included in the basis of cost for assessment purposes. 2) A tax imposed on the retail sale of tangible personal property in California. The sales tax is imposed on the retailer of tangible personal property, not the purchaser.
Sales Tax Reimbursement- Although the sales tax is imposed on the retailer making the retail sale, the retailer may collect reimbursement from the purchaser for the sales tax if their contract of sale so provides (usually called simply “sales tax”).
10 Glossary of Terms-
Schedule “A” of Form BOE-571-L- A detailed list of equipment by classification with costs accumulated by year of acquisition. Includes machinery and equipment used for industry, profession or trade, office equipment, and computers and computer-related equipment.
Schedule “B” of Form BOE-571-L- A detailed list of building costs; building improvement costs; leasehold improvement costs; land improvement costs; land and land development costs, all with costs accumulated by year of acquisition.
Schedule “D” (Form 571-D)- A supplemental record for reporting the detail of acquisitions and disposals of property reported on Schedule B of the Business Property Statement (form BOE-571-L).
Secured Property- Property for which property taxes are adequately secured by a lien on real property.
Secured Property Tax- Taxes levied on real property. This includes land, all mines, mineral and quarries in the land, and improvements, among others.
Secured Roll- That part of the assessment roll containing state assessed property and property the taxes on which are a lien on real property sufficient to secure payment of taxes. R&T Code Section 109.
Security Interest- An ownership interest in real estate in which individual(s) are only on title to help an assessee qualify for a property loan. The individual(s) do not have beneficial use of, or equity interest in, the property.
Segregation- A separation for the individual handling of an assessment on the current Roll. Any person or government agency showing evidence by presentation of a properly-executed Grant Deed, purchase contract, Deed of Trust, or final decree of court of an interest in any parcel of real property that does not have a separate valuation on the Roll, and who is not the owner or purchaser of the entire parcel, as currently assessed, may apply to have the parcel separately valued on the roll for the purpose of paying current taxes.
Seller’s Permit- Every person desiring to engage in business in California as a seller of tangible personal property which is subject to sales tax, must hold a seller’s permit issued by the BOE.
Situs- The place where property is legally situated, the more or less permanent location of the property. Property Tax Rule 203, 204, & 205 of the California Code of Regulations.
Standard of Proof- The standard of proof refers to the amount of evidence that a person must present in order to win an appeal. Unlike criminal cases, where the prosecutor must prove the defendant’s guilt beyond reasonable doubt, taxpayers, in most situations, can win their appeals by presenting a preponderance of the evidence. This means that the taxpayers need only show that it is more likely than not that their arguments or claims are true
State Board of Equalization- The state agency that oversees the activities of the office of the local Assessor and assesses public utilities and railroads.
Statute of Limitations- A legislative enactment which prescribes a period within which an action may be brought.
Stipulation- A document signed by an assessee that confirms an agreement between the Assessor Department and an assessee for a revised valuation.
Structure- An improvement whose primary use or purpose is for housing or accommodation of personnel, personalty, or fixtures. Property Tax Rule 122, California Code of Regulations.
Subdivision- A tract of land divided by means of a map, into lots or lots and blocks, for the purpose of sale or lease, generally for residential or commercial purposes.
Successor Liability- The amount owed by the purchaser of a business or stock of goods, up to the purchase price, for failing to withhold from the purchase price an amount to satisfy the tax or fee liability owed to the BOE by the seller of the business or stock of goods.
Summary Decision- A written decision that contains the findings of fact and conclusions of law that form the basis of the BOE’s decision on an appeal. A Summary Decision is frequently issued when a decision is requested by the taxpayer based on the written record and without an oral hearing.
Supplemental Assessment- 1) Assessment for events such as changes in ownership and completed new construction, which occur on or after the January 1 lien date. These types of events cause an Adjusted Base Value. The event has its own tax bill, and becomes a lien on real property as of the date of the reassessable event. 2) An assessment generated by reassessable changes in ownership or assessable new construction, that is in addition to the annual assessment. A supplemental assessment represents the difference between the current enrolled value and the value which is established as of the date of the event, (change in ownership or completion of new construction). Each event generates a separate supplemental assessment which becomes a lien on real property. Events that occur between January 1 and May 31 result in two supplemental bills: the first bill is for the balance of the current fiscal year; the second bill is for all of the upcoming fiscal year.
Supplemental Notice- A document used to inform and notify the assessee of a supplemental assessment resulting from either a change in ownership or completed new construction.
Supplemental Tax- Tax levied on a property as it exists on the date of the change of ownership or completion of new construction.
Supplies- Assessable property used up in the normal operation of a business, but which are not intended for sale or lease.
Suspended Corporation- A corporation that has had its powers, rights, and privileges to do business in California suspended or forfeited by the:
“¢ Secretary of State for failure to file a required Statement of Information; or
“¢ FTB for failure to file a tax return and/or failure to pay taxes, penalties, or interest.
T
Tax Rate Area- A defined area of land with the same tax rate, together with a unique combination of taxing districts.
Taxable Value- For personal property, the full cash value (market value) on the lien date each year.
Taxpayers’ Rights Advocate Office- The Taxpayers’ Rights Advocate Office provides impartial help on tax matters for taxpayers when they are unable to resolve their matters through normal channels, when they want information regarding procedures related to a particular set of circumstances, or when they believe there were rights violations in their dealings with the BOE. The Taxpayers’ Rights Advocate Office may be contacted by telephone at 888-324-2798 or through the email form.
Tenant Improvements- Improvements made by the tenant/lessee. See also “Leasehold Improvements”.
Timeshare- An undivided fee interest in whole property with an exclusive right to use a specified unit type during a specified time period.
Tract Maps- Under the requirements of the Subdivision Map Act, a map that subdivides large parcels of land into smaller lots of marketable title. Lots sold using tract number/name, block number/name, and lot number/name offer the simplest kind of deed description and maximum information.
Trade Fixture- A type of fixture that is “trade-related.”
Transfee (Buyer)- A person who receives a transfer of title to real estate.
Transfer- A change in the chain of title; may result in a reassessable or non-reassessable change of ownership.
Transfers of Cigarettes and Tobacco Products Between Retail Stores- Retailers must keep documents proving that the excise taxes have been paid on all cigarette and tobacco products in their inventory. They must provide these documents to BOE staff when requested. Transfers of cigarette and obacco products between retail stores are only allowed if the retail stores are owned and licenses held by the same person/ownership and records are maintained at each store location involved in the transfer.
Transfor (Seller)- A person who makes a transfer of title to real estate.
True Lease- An agreement in which an owner gives up possession of property for consideration and a definite term; and at the end of the term, the owner has the absolute right to retake, control, or convey the property.
U
Underground Storage Tank (UST) Permit- Permit to own or operate an underground storage tank issued by the local agency to the owner or operator of the tank.
Undocumented Cigarette or Tobacco Products- Any cigarette or tobacco product in the inventory of a licensed retailer for which the retailer lacks documentation that the excise tax has been paid on the product. In the case of cigarettes, documentation constitutes a valid California Cigarette Tax Stamp affixed to the cigarette pack. For tobacco products, it is the purchase invoice for the tobacco product, showing that the product was purchased from a licensed tobacco products distributor and that the tax has been charged on the invoice.
Unsecured Property- 1) Property on the unsecured roll. 2) Property for which the taxes are not secured by a lien against real property. Consists largely of business property owned by tenants.
Unsecured Roll- The unsecured roll is the remainder of the roll not on the secured roll. The taxes on the unsecured roll are a personal liability of the assessee. R&T Code Section 109.
Unsecured Tax- A value-based tax that is not secured by property. This type of tax is the liability of the person or entity assessed for the tax.
Use Tax- 1) A tax on property purchased outside the state, where, if it had been purchased within the state, the property would have been subject to a sales tax. 2) California use tax generally applies to the storage, use, or other consumption of tangible personal property in California. California use tax is a companion to the sales tax. Persons or businesses generally owe use tax when they use, store, give away, or consume physical products in California if they did not pay California sales tax on their purchase. Use tax generally applies to untaxed purchases made from out-of-state sellers. The use tax rate for a California location is the same as the sales tax rate.
V
Valuation Notices- An annual informational letter mailed to each assessee stating the value as it will appear on the annual assessment roll for property tax purposes. The “Secured Property Valuation” notice informs the assessee that the Total Assessed Value is the factored base year value as of lien date. The “Secured Property Notice of Assessment Economic Adjustment (ECA)” informs the assessee that the Total Assessed Value is a temporary Proposition 8 market value (decline in value) as of lien date.
Veterans’ Exemption- A $4,000 exemption granted to a qualified veteran that reduces the assessed value of real or personal property owned by the veteran.
W
Waiver of Limitation- A document signed by a taxpayer extending the deadline (that is, the statute of limitation) by which the BOE may assess additional taxes or fees for a specified reporting period.
Welfare Exemption- An exemption for property used “exclusively” for religious, hospital, or charitable purposes.
Wholly-Exempt Property- Property acquired by government agencies or other public entities that become exempt from taxation under the laws of local, state, or federal governments.
Withdrawal- A signed document that indicates an assessee will no longer pursue an appeal.
X
XYZ Letter- A letter in a form approved by the BOE which is sent to some or all of the seller’s purchasers inquiring as to the purchaser’s disposition of the property purchased from the seller. A response to an XYZ letter is not equivalent to a timely and valid resale certificate, but the BOE will consider the responses in determining whether the seller has established that its sales were for resale.
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