The Silicon Valley Leadership Group has a strong tradition of finding regional, state and federal bi-partisan policy solutions which recognize the innovation economy by bringing California and the U.S. tax codes up to date. Our top priorities are promoting tax policies that are competitive globally and with other states and creating level playing fields for business sales and use and property taxes.
Vice President, Tax Policy
Tax Policy Committee
Specifically, the Tax Policy Committee seeks to:
- Build coalitions to improve U.S. competitiveness and employment opportunities by educating decision makers about the effects on businesses of onerous tax legislation and ballot measures, such as split roll property taxation.
- Support expanded Research and Development (R&D) spending by supporting the repeal of R&D expense amortization.
- Promote statewide tax fairness, certainty and predictability by the State Legislature, Franchise Tax Board, Board of Equalization and County Assessors, including conformity to Federal tax legislation, except for the amortization of R&D spending.
- Influence California responses to court decisions such as Wayfair and Nortel/Lucent.
Participating Member Companies
- Agilent Technologies
- Applied Materials
- Aviat Networks
- Barracuda Networks
- Cisco Systems
- Deloitte LLP
- Ernst & Young LLP
- Genomic Health
- Grant Thornton
- Intel Corporation
- Intuitive Surgical
- KLA Tencor
- KPMG LLP
- Lockheed Martin
- Mentor Graphics
- NXP Semiconductors
- Power Integrations
- San Jose Water Company
- SunPower Corporation
- Silicon Valley Bank
- SYNNEX Corporation
- Texas Instruments
- Trimble Navigation
Defending Against Onerous Tax Legislation and Ballot Measures
Executive Champion: TBD
Priority: The Leadership Group Tax Committee seeks to educate decision makers about the effects on business of onerous tax legislation and ballot measures. We want to ensure that business taxes do not disproportionately increase the California business tax burden and jeopardize competitiveness and do allow employers to compete in the local, state and national economy without being hindered with onerous taxes.
- oppose tax legislation/ballot measures that disproportionately increase California business tax burden and jeopardize competitiveness
- monitor local, State and Federal policies that alter the business tax code
- defend against proposals compromising taxpayer confidentiality or requiring businesses to publicly disclose proprietary business information
Research and Development Expense Amortization
Executive Champion: Dan Mennel, Market Leader for Strategic Federal Services, Grant Thornton
Priority: We seek to repeal the provision of the Tax Cuts and Jobs Act of 2017 that requires amortization of R&D expenses over 5 years instead of allowing for immediate deduction of R&D expenses, which had been part of the tax code at least since 1954.
- support the repeal of Federal R&D amortization and oppose California conformity
Property Tax Valuation Fairness - Oppose Split Roll/Split Rate Property Taxation
Executive Champion: Ashit Parekhji, Property Tax Manager, Intel
Priority: Changes to Proposition 13 will inhibit commercial property owners and lessees from making improvements and investments. With an increase in the assessment schedule or the price rate of the assessment through a split roll or split rate, California businesses would be unfairly burdened and their ability to compete in the innovation economy will be jeopardized.
The Leadership Group opposes any efforts to dismantle Proposition 13 (property valuations) that changes the law to a split roll or where commercial properties are valuated at a different rate or frequency than residential, personal property, or land.
- oppose changes to Proposition 13 that would reduce accountability or provide different treatment of business and residential properties
- promote fair valuation tables
- promote consistent and efficient audit processes
Influence California Response to Court Decisions
Executive Champion: Mark Stefan, Partner in U.S. Indirect Tax Practice, EY
Priority: The Nortel/Lucent California court cases brought to light an incorrect assessment of taxes on intangible software. We have been monitoring the possible adoption of new rules regarding the application of Regulations 1502 and 1507 to provide for greater clarity, and possibly rules that will lead to lower taxes in many situations. The Wayfair decision by the U.S. Supreme Court overturned earlier cases and held that states could require out of state vendors to collect and remit their sales and use taxes. The Tax Committee will work to help ensure that California adopts reasonable policies in response to this new source of revenue.
- support reasonable, simple and fair application of state business taxes on tangible or intangible products
- closely monitor alterations to regulations 1507 and 1502
- closely monitor Technology Transfer Agreements for any refund claims, and regulation 1507 and 1502 impacts
- advocate for the development of reasonable valuations and audit manual guidance for business taxpayers
Comprehensive Federal Tax Reform
Sales Taxes on Services
Comprehensive Business Tax Reform
Silicon Valley is a major driver of the U.S. economy through using innovation to create direct and indirect U.S. jobs. Silicon Valley’s success helps grow our nation’s economic success. Addressing business tax reform will ensure our continued economic growth and is a defining factor in determining where America’s leading global companies decide to locate and grow jobs.
As technology and our economy changes, our tax code must follow suit. Many prominent U.S. based businesses, such as Apple, Google, Facebook, Tesla, and many others, did not exist when our tax code was last rewritten in 1986. Updating the tax code, in a smart and effective manner, will make substantial progress towards reclaiming America’s global economic leadership.
An upgraded tax code, with lower rates and an enhanced Research and Development Tax Credit, are key factors to leading economic growth. As tax reform is considered, the fair application of competitive business tax rates is critical for spurring domestic business investment and job creation regardless of the structure of the business. The U.S. needs a modernized tax structure that will help America’s global businesses create jobs and grow the nation’s innovation economy. Silicon Valley competes in a worldwide marketplace. It is time America had a world-class tax system to stimulate new jobs and new industries across the U.S.
Silicon Valley Leadership Group’s Principles for Evaluating Local Tax Measures
In evaluating local and regional tax measures that come before the organization, the Leadership Group will use the following criteria:
- The measure should be for a fixed term and therefore include a built-in sunset (If the measure does not include a sunset, are the reasons for an on-going tax clearly defined?)
- Funds generated by the measure should be used for specific and identifiable purpose(s)
- A consistent dollar amount is applied equally to residential and commercial property parcels
- Measures should be capped at a certain level in consideration of large businesses with many parcels (contiguous parcels for the same business)
- The measure should contain a provision for a citizens’ oversight committee