When it comes to the process of challenging taxes, California stands alone. Tax experts across the state point to a combination of factors - most notably a lack of political will - that explain why California now ranks as the worst state in the country to contest taxes. While other states in recent years have removed quasi-judicial powers previously held by tax administering boards, California's 136-year-old State Board of Equalization, or SBOE, remains entrenched as the only body in the country that tasks elected officials with hearing challenges to taxes they administer.
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Tax dispute rulings by the California SBOE are not binding and appeals go before superior court judges. Bradley R. Marsh, a shareholder at Greenberg Traurig LLP, said he has had "plenty of clients" shy away from the state's first chance at independent appeal because the pay-to-play requirement was too expensive and risky, choosing to pay the tax rather than risk added interest and court costs.
When a client does pay, Marsh said he spends the majority of his energy educating the judge on complex tax law.
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