If adopted, the CIP would become operational January 1, 2013 and is expected to generate $32 million by its third operating year. It will remain revenue-neutral while ramping up in the first two years.
The partnership would achieve significant savings by accelerating the investigations process, reducing prosecution costs, and creating efficiencies through the collaborative efforts of the CIP and law enforcement agencies.
California’s underground economy deprives the state of an estimated $8 billion in state taxes annually through a spectrum of illegal activities, including the sale of counterfeit goods like “knock off” designer items, offering and paying for services under the table, the exploitation of victims of human trafficking, and smuggling goods into California without paying the required taxes.
Criminals who don't pay taxes harm legitimate businesses by offering goods for lower prices and deprive the state and local governments of corporate, personal and sales and use taxes used to fund critical state and local public services like schools, public safety, transportation, and others. Illegal operators in the underground economy ignore many state laws, deprive workers of employment protections, contribute to crime in our local communities and create health and safety hazards for consumers.
"The BOE sponsored legislation is needed to facilitate greater collaboration and information sharing among several State agencies to combat criminals who deprive California, a state drowning in red ink, of an estimated $8 billion annually in corporate, sales, use and personal income taxes that could be spent on schools, public safety, hospitals and other essential services. It's critical for this legislation to continue its forward momentum. Imagine what we could do if we could recover the enormous amount of money lost to the underground economy. We would be able to hire 67,000 police officers or 77,000 fire fighters or 87,000 teachers a year."
Chairman Jerome E. Horton, California State Board of Equalization - Fourth District
The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects more than $53.7 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov.