On April 1, 2025, the California Department of Tax and Fee Administration (CDTFA) adopted Emergency Regulation 1808, clarifying reporting, publication, and penalty requirements under Revenue and Taxation Code (RTC) section 7213. This regulation enforces new transparency measures regarding local tax revenue sharing agreements, which are often used by jurisdictions to incentivize retailers.
Why the Emergency Regulation?
Emergency Regulation 1808 was adopted to ensure clarity and compliance ahead of the first significant reporting deadline on April 30, 2025. It addresses ambiguities in RTC section 7213, defines key terms (such as “rebated sales and use tax revenues”), and specifies how and when local agencies must report and publish information related to tax revenue sharing agreements.
Key Provisions of Regulation 1808:
- Annual Reporting Deadline: Local agencies must submit a Tax Revenue Sharing Agreement Reporting Form to the CDTFA by April 30 each year, covering the previous fiscal year.
- Website Publication Requirement: Agencies that share tax revenue must publish agreement details on their website by April 30, including a prominent homepage link.
- CDTFA Publication: The CDTFA will post statewide summary data by June 1 annually.
- Penalties for Non-Compliance: Agencies failing to report or publish required information may face fines:
- $1,000/day for the first 180 days of non-compliance.
- $4,000/day from day 181 to 365.
- Extension Requests: Agencies may request a 30-day extension for good cause by submitting a written statement to the CDTFA via email.
Clarifications Included in the Regulation
- Defines key terms such as “Department,” “person,” and “fiscal year.”
- Clarifies what constitutes an indirect rebate of tax revenues.
- Excludes agreements between local agencies under Article XIII, Section 29 of the California Constitution from the reporting requirements.
Impact and Benefits
Emergency Regulation 1808 enhances transparency and accountability in local government tax agreements and ensures timely and uniform reporting. While the regulation imposes no reimbursable mandate on local agencies or school districts, the CDTFA estimates a modest one-time cost of approximately $484 for internal website updates.
The emergency regulation will remain in effect for two years and may be readopted thereafter.
How Thompson Tax Can Help
Navigating new regulatory requirements can be complex—especially when it involves compliance deadlines, potential penalties, and public transparency obligations. Thompson Tax is here to assist local agencies and stakeholders with:
- Evaluating existing tax revenue sharing agreements to determine compliance status,
- Preparing and submitting the CDTFA-required reporting forms accurately and on time,
- Developing or reviewing website publication strategies to meet RTC 7213 visibility standards,
- Advising on potential indirect rebates and how they may trigger reporting obligations, and
- Requesting extensions or addressing CDTFA notices with well-documented responses.
As Your Trusted Tax Advisors, we partner with you to reduce risk, ensure compliance, and streamline your reporting process with confidence and accuracy.
Have questions or need support? Contact our team today to schedule a consultation.