California has the nation's worst state tax administration practices, the Council on State Taxation, a corporate-backed and Washington-based tax study organization, says in a new report.
California scored a D-minus, the lowest score of any state, on an eight-criterion assessment, a notch lower than seven other "D" states. Alaska, at A-minus, scored the highest.
"It is a common truth that taxpayers will more fully and willingly comply with a tax system they perceive to be balanced, fair, and effective," the organization said. "Taxpayers operating in a system they perceive as oppressive, unfair, or otherwise biased are less likely to voluntarily comply. The clear message to state legislatures is that they must be sensitive to the compliance implications and competitiveness concerns created by poor tax administrative rules and ineffective tax appeal systems."
California was rated especially poorly on the independence of its tax dispute resolution process. A three-member board composed of politicians or their surrogates, the Franchise Tax Board, oversees personal and corporate tax collection. A five-member board of elected officials, the Board of Equalization, handles appeals from the Franchise Tax Board, directly collects sales taxes and oversees property tax administration.
The full COST report may be found here.
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