Sam Brotman, JD, LLM, MBA March 7, 2023 28 min read

The California State Board of Equalization: What Does it do Today?


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

The CA State Board of Equalization (BOE) is a powerful agency with a complex and important role in California's tax system.

With its broad authority over sales and use taxes, property taxes, and other taxes and fees, the BOE plays a critical role in ensuring that California's tax system is fair and effective.

But, despite its significance, the BOE remains a mysterious and often misunderstood entity.

From the controversies that have surrounded the BOE in recent years to the critical role it plays in California's economy, we'll cover everything you need to know to understand this essential element of California's tax system.

What is the California State Board of Equalization?

The California State Board of Equalization, also referred to as the BOE, is often likened to the state’s version of the Department of Revenue.

It's a tax agency that used to be responsible for administering a variety of taxes, including sales and use taxes, property taxes, and special taxes.

The BOE was also responsible for administering various regulatory programs related to alcohol and tobacco products.

What does the state Board of Equalization do in California?

Prior to 2017, the BOE was the primary government agency in charge of collecting sales and use taxes, auditing taxpayers, and hearing tax appeals.

These responsibilities were similar to the duties of other states’ departments of revenue mentioned above.

In fact, the responsibilities far outnumbered the three areas of taxes that the BOE is limited to overseeing today. Its duties previously included:

  • Individual and business taxes
  • Income taxes
  • Franchise taxes 
  • Fuel taxes 
  • Cigarette taxes

However, the state of California board of equalization was plagued with various controversies and issues that led to its restructuring in 2017.

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California BOE controversies & failings

Some of the major issues that the BOE faced included:

  • Mismanagement of funds: There were allegations that some California BOE members misused public funds and engaged in unethical conduct related to travel expenses and office renovations.
  • Political interference: Concerns arose that BOE members were using their positions to interfere in tax-related decisions and investigations to benefit their political allies and donors.
  • Inefficiency and outdated technology: The BOE was criticized for its outdated technology systems, which led to delays in processing tax refunds and audits. Additionally, there were concerns about the efficiency and effectiveness of the BOE's operations.
  • Conflict of interest: Some BOE members were accused of having conflicts of interest, as they had business interests that were directly affected by the agency's decisions.

These issues led to a loss of public trust in the BOE and calls for its restructuring. As a result, the BOE's functions were transferred to other state agencies in 2017.

More specifically, one major event that contributed to an increase in calls to overhaul the BOE was a March 2017 report published by the California Department of Finance, which found that the BOE had misallocated millions of dollars in tax revenue.

Shortly after the publication of the report, then Governor Brown requested that legislative leaders draw up a new law to address the BOE’s missteps.

The new legislation ultimately included stripping the BOE of its tax administrative duties and authority to decide tax appeals.

As a result, on June 27, 2017, Governor Jerry Brown signed AB102[1], The Taxpayer Transparency and Fairness Act of 2017.

Duties assigned under the Taxpayer Transparency and Fairness Act

The Act cited many issues that had pervaded the BOE in the past, including:

1. Failure to Report Accurately

Transparency was supposed to be the hallmark of the BOE.

Neither the public nor the California legislature were provided with accurate tax information by the Board.

Because of this, there was a lack of confidence both in the data the BOE reported, and in its ability to effectively administer California's taxes in the future.

2. Undue Influence and Political Maneuvering

The BOE members and their staff were subject to a barrage of complaints alleging that they had made numerous attempts to influence BOE employees.

More specifically, this was regarding the:

  • Adjudication of audits
  • Collection of taxes
  • Investigations.

3. Glaring Errors and Miscalculations

The BOE clearly made severe miscalculations throughout its operations, which became glaringly obvious when the allocation of over $60 billion in taxes were misappropriated.

And so, these funds were unable to go toward public services, city agencies, and other state and county-level benefits meant for the public.

Calif. Board of Equalization stripped of most responsibilities

As a result of the upheaval and damage caused by the Calif. Board of Equalization’s mistakes, the Act transferred a significant portion of the BOE’s responsibilities to

  1. The newly-created California Department of Tax and Fee Administration (CDTFA)
  2. Office of Tax Appeals (OTA)
  3. The reformed Calif. State Board of Equalization

Under the terms of the Act, the CDTFA became responsible for administrating all taxes not mentioned under the California constitution, including:

  • Sales and use taxes
  • Fuel taxes
  • Cigarette taxes

The CDTFA would further gain the power to handle auditing of all state taxpayers. 

Further, the power to adjudicate tax appeals was transferred to another newly-created department, known as the OTA. 

Under the new legislation, the CA tax Board of Equalization’s remaining administration included overseeing only the taxes mentioned in the California Constitution:

  • Property
  • Insurance
  • Alcoholic beverage taxes

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How Does the Act affect the CA tax Board of Equalization’s operations?

Of the three primary areas of taxes that the CA SBOE is now responsible for, the most complex (and important) is, arguably, the Property Tax Program.

According to the BOE website, the Property Tax Program focuses intently on specific areas of property tax, but lets cover the new areas in more detail:

CA SBOE Oversight of Property Tax

The first area is the valuation of state-assessed public utility and railroad property.

In accordance with this administrative responsibility, the BOE has the power to value the total state-assessed roll in excess of $110.5 billion annually.

Additionally, the BOE highlights the fact that it acts as an oversight division to “ensure compliance by county assessors with property tax laws, regulations, and assessment issues.” 

In total, there are 58 county assessors, each representing a county within the state per the local office’s authority. For example, the first county assessor listed is Phong La of Alameda County. 

Phong La’s role is “locating all taxable property within the County, establishing its taxable value, and applying any legal exemption.” 

The assessor role is uniform throughout all counties in California. Considering that these assessors are already government representatives, the BOE’s role in overseeing and guiding the county assessors’ programs is yet another example of how its power has been minimized.

Effectively, the Act has shifted the BOE’s role from directly overseeing the people of the whole state to, instead, 58 assessors who, themselves, are already overseeing their direct constituents within their respective counties.

Oversight of Alcoholic Beverage Tax

The BOE works in conjunction with CDTFA under the alcoholic beverage tax program,

While the CDTFA collects and administers the taxes under the program in cooperation with the BOE, the BOE maintains the power to hear all appeals for claims for refund or petition for redetermination denials.

Oversight of Insurance Tax

Finally, the BOE’s role in the realm of insurance tax is also one that is tied closely with the function of CDTFA, as well as the Department of Insurance (CDI) and the State Controller’s Office (SCO).

Under the Insurance Tax Program, the CDI holds the power to grant authority to insurance companies to transact insurance business in California.

The CDTFA has the responsibility for:

  • Issuing deficiency assessments
  • Evaluating appeals
  • Issuing refunds 

Despite these changes, the BOE maintains its ability to hear all appeals for claims “for refund or petition for redetermination denials.” 

Ultimately, the BOE has clearly been relieved of almost all of its former duties. The CDTFA, OTA, CDI, and SCO have been delegated the vast majority of BOE’s prior responsibilities, some of which they share in tandem with or “on behalf of '' the BOE.

CA State Board of Equalization vs. Department of Revenue (other states)

To provide some context, most other states do not have a “Board of Equalization.”

Typically, they are literally referred to as the state’s Department of Revenue, Division of Revenue, or some other permutation of the term

For example, Pennsylvania’s Department of Revenue (DOR) states on its website that its mission is to collect and distribute “most of the tax monies due to the Commonwealth of Pennsylvania.”

It further states that, on an annual basis, the department will process over 10 million business and individual tax reports and payments. 

Other states, such as Georgia and Delaware, have similar mission statements published on their DOR websites, following the shared theme of “administering the tax laws of the state” or “collect taxes and other revenues required by the law.” 

By contrast to the more general functions of these other states’ departments, the CA State Board of Equalization has a fairly specific mission statement that enumerates its responsibilities.

The website states:

“Today, the BOE focuses on its Constitutional responsibilities: Property Tax, Alcoholic Beverage Tax, and Tax on Insurers.”

California Board of Equalization districts

Despite the overhaul, the CA BOE remains the only publicly elected tax commission in the United States.

With this in mind, the Board is made up of four directly elected members, each representing a district, and a State Controller who is elected on a state-wide basis.

There are currently four California Board of Equalization districts:

District 1 

The following counties make up the First Equalization District:

Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Glenn, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Bernardino, San Joaquin, Shasta, Sierra, Siskiyou, Solano, Stanislaus, Sutter, Tehama, Tulare, Tuolumne, Yolo, and Yuba.

The district’s current representative is Ted Gaines, a Republican politician whose platform centers upon tax-cutting, combating crime, and addressing the homelessness crisis. 

His main supporters include:

  • California Republican Party
  • Howard Jarvis Taxpayers Association PAC
  • California Republican Assembly

District 2 

The Second Equalization District is made up of:

Alameda, Contra Costa, Del Norte, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Sonoma, Trinity, and Ventura. 

The district’s representative is Sally Lieber, who is a Democratic politician and won the district by a significant margin with 69.8% of the vote. 

Her platform primarily focused on her status as a “corporate-free” candidate committed to establishing a fair and equitable tax system for “homeowners, renters, veterans, people with disabilities, small businesses, and communities of color.” 

District 3 

Unlike the other three districts, District 3 only serves one county: Los Angeles. 

The incumbent representative is Tony Vazquez, a Democratic politician whose platform focuses on three top priorities:

  1. Helping taxpayers pay the minimum amount of tax under the law
  2. Working with 58 county assessors to comply with all property tax laws, rules, and assessment standards
  3. Making housing projects affordable by administering the BOE's Property Welfare Exemption Program

His top supporters include:

  • California Labor Federation
  • California Federation of Teachers
  • California Democratic Party
  • Service Employees International Union 

District 4 

Lastly, the Fourth Equalization District encompasses the counties of:

Imperial, Orange, Riverside, Sanbernardino, and San Diego. 

The district’s current representative is Democrat Mike Schaefer whose platform highlights the top three priorities of:

  1. Using the BOE’s oversight responsibilities for the state’s $77 billion property tax system to fund schools and local government services
  2. Protect Homeowners’ Exemptions for veterans, seniors, families and individual taxpayers
  3. Advocate for tax justice and equity to protect California citizens’ tax dollars

His top supporters include:

  • State controller Betty Yee
  • State treasurer Fiona Ma
  • California Democratic Party

Calif. State Board of Equalization’s Impact on Sales Tax Audits Today

Today, the BOE effectively does not have much of an influence at all when it comes to California sales tax collection, audits, and adjudication of appeals.

These responsibilities have been allocated to the CDTFA.

Check out our California sales tax audit guide for an in-depth view on what to do if you’re being audited.

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Final thoughts on Calif. State Board of Equalization

The California State Board of Equalization today bears very little resemblance to the version that existed prior to the Taxpayer Transparency and Fairness Act. 

Whether you are a resident or a small business owner in the state, the likelihood of a tax audit or investigation from the BOE is significantly slimmer compared to one issued by the more powerful CDTFA.

Nevertheless, if you have concerns or questions about the functions of any of the state’s various tax collecting agencies, the best measure you can take is to schedule a call with a trusted legal advisor.

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Last updated: June 8, 2024

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law



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