Michelle Steele, vice chairwoman of the California Board of Equalization and representative for a five county district which includes San Diego, was credited Monday night by Los Alamitos Councilman Richard Murphy with "making a government agency friendly" for the last eight years.
Steele told small business owners gathered for a class on basic sales and use taxation in Los Alamitos what motivated her for this job. She asked the class participants:
"When you are a taxpayer, what do you do when you get a letter from a tax agency?"
The answer most people respond with is: "You pay the tax agency."
Steele: 'They harassed my mother'
When she was young, she witnessed her immigrant mother working very hard, every day. "She started a clothing shop in downtown Los Angeles," said Steele. But when her mom felt ready to move forward and risk opening up another shop, her mother got a letter from a tax agency.
Actually, what young Michelle witnessed was worse. Said Steele:
"They harassed my mother."
"So," Steele admits to the class, "I had a grudge against them." Steele quotes her husband, as telling people "don't make this asian lady mad, because she's going to be your boss some day."
Zip codes and overcharging sales tax
Californians have been overcharged sales tax when they make their purchases, says Steele. Sometimes the use of zip codes to determine local tax rates is the reason for this.
In an opinion piece on her website, she mentions an email received from a San Diego taxpayer who complained about being overcharged sales tax because of his zip code.
"Recently a taxpayer in San Diego sent an email to my office because he had been overcharged sales tax when purchasing tools for his home business. The taxpayer lives in an unincorporated community near El Cajon. His home shares a zip code with that city, but not the city's additional 1 percent sales tax."
The man had been charged 9 percent in sales tax instead of the county rate of 8 percent that he owed, Steele explained. "When he called the tool company to let them know about the error, they said that their records showed he lived in El Cajon because he had the same zip code, so they charged him the El Cajon tax rate."
Steele stated that the Board of Equalization officially frowns upon the use of ZIP codes to determine tax rates for this very reason. However, she adds that "... there are few other cost effective options available for in- and out-of-state businesses that are required to collect the tax at the local rate when they ship products to California customers."
Emily Schrader, an information officer for the California BOE office in Irvine, stated that the agency is responsible for collecting sales and use taxes, but also invited business owners to contact them for help. One of the changes Steele touted as a major accomplishment was the fact that it used to be that any business owner who was one day late in paying what they owed would be hit with an entire month.
"It used to be," said Steele with a smile. "Now if you are late one day, you only owe one day not the entire month." She added a final thought, before heading off to her next class of confused taxpayers:
"I want you to prosper."