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BOE warns discovery burden after adding VOIP entities; staff requests more resources
Summary
Board staff told the Board of Equalization that adding 61 VOIP entities for 2026 will increase discovery and audit workload; roughly 200 additional entities still need to be investigated and staff said it will seek budget and technology resources to handle the work.
Board staff warned Wednesday that newly identified voice-over-IP (VOIP/VOIPE) entities will increase the State Assessed Properties Division’s workload and that additional staffing and technology resources will be necessary to process discovery, audits and allocations.
"In total, we added assessments for 61 VOIPE entities this year," said Jack McCool, chief of the State Assessed Properties Division. He told the board those 61 entities contributed less than half a percent to total unitary value but "added a significant amount of work to our overall workload."
McCool said staff began with a CPU-maintained database of about 400 VOIP entities and has so far received annual filings from 61; roughly 200 entities remain to be researched to determine whether they own assessable property in California or are already reported locally. "We still have close to 200 entities that we are going to have to work through to identify if in fact they do have assessable property in California," McCool said.
Executive Director Evette Star told members the agency has submitted two budget change proposals (BCPs) — one for technology modernization and one to address a change in law — and that the Department of Finance is supporting the BCPs in the governor’s budget. "We have one for technology... and then we have a BCP to address a change in law," Star said. "I am happy to report that the Department of Finance supports our BCPs and they're currently in the governor's budget."
Board members pressed for details on enforcement and penalties. Staff explained the statutory penalty framework for late filing: a standard 10% penalty applies, with a 25% penalty available for willful failure to file after repeated non-filing, and a $20 million statutory cap on late-filing penalties. Staff said notices of unitary value will include instructions on how to file an appeal and how to request penalty abatement where relevant.
Why it matters: Identifying additional assessable entities could increase local assessed value and county tax revenue, but only after proper discovery, notice and appeal processes. Staff said the discovery work will cut into off-season audit capacity and will require outreach to county assessors to resolve local-reporting questions.
Next steps: SAPD will continue discovery work, coordinate with county assessors, and pursue the BCPs for staffing and technology. Notices of unitary value and appeal instructions are scheduled to be mailed to assessed entities following board adoption.
Direct quotes in the record were used from staff and executive leadership; board members asked follow-up questions about penalties, collection for apparently defunct entities, and the time frame for additional discovery.
