Vendors and contractors who got paid this month with state-backed IOUs are getting a break: They can submit IOUs as payment of their taxes on sales and use.

The state Board of Equalization, which collects sales and use taxes from companies, made the announcement last week.

On July 1, the state began issuing IOUs to vendors and contractors as a way to conserve cash. The IOUs have been problematic for some vendors and contractors because of questions on how to bank them.

A vote on the proposed budget deal was pending at press time last week; however, there was no announcement regarding when the state would stop sending out IOUs and resume cash payments to contractors and vendors.

Meanwhile, Anita Gore, spokeswoman for the Board of Equalization, said companies can apply their IOUs to some or all of their sales and use tax payments, which are due Friday. Most companies report their sales taxes quarterly, so the Friday deadline covers taxes owed for the second calendar quarter. IOUs will also be accepted for the next quarterly payments, due Oct. 31.

If the total amount owed in taxes exceeds the value of the IOU, the IOU can be supplemented with a check, Gore said. The IOU must be endorsed on the reverse side with the phrase "Pay to the order of the State Board of Equalization" and then signed.

The state's other tax collection agency, the Franchise Tax Board, announced last month that it would accept IOUs as payment. Personal and corporate income taxes are paid to the Franchise Tax Board.

Regulations Rejected

The seven-member Occupational Health and Safety Standards Board all appointees of Gov. Arnold Schwarzenegger rejected a series of emergency amendments by the governor's administration to the state's heat illness prevention regulation.

The proposed amendments were triggered by inspections during an April heat wave that found several agricultural employers in the Central Valley were not properly following heat illness prevention regulations passed three years ago.

The amendments added details to the requirement that employers provide shade to workers, and set a trigger of 85 degrees for the regulation to take effect. Besides agricultural companies, the amendments would have impacted the construction, landscaping and road maintenance industries.

By giving the amendments "emergency" status, the Schwarzenegger administration hoped they would be applied in time for the summer crop-picking season.

The amendments first came before the standards board in June, but questions immediately arose over the selection of 85 degrees as the threshold. The board voted to consider the amendments until its next meeting in July so that staff workers could respond.

According to Dean Fryer, spokesman for the Department of Industrial Relations, which oversees the standards board, board members raised additional problems with the emergency amendments at the July 16 meeting. They questioned the need to apply the amendments to all industries when the problems flagged during inspections were concentrated in the agricultural sector.

Board members also wanted consideration of exemptions for some construction projects where building shade canopies may not be feasible.

In the end, the board split 3-3, with one member absent, effectively quashing the implementation of the emergency amendments. Instead, the amendments will now go through the normal drafting and comment process, returning to the board early next year.

"We hope to have these amendments in place for next summer," Fryer said.

Lobbying Rules

Revisions to lobbying rules for the city of Los Angeles are going forward, despite objections from members of business groups who say the proposed rules do little to level the playing field with labor unions and their allies.

The revisions center on who must register as a lobbyist. Under existing rules, anyone who has more than 30 hours of contacts with city officials over a 90-day period must register and report all their meetings to the city. The proposed revisions would change the registration threshold to five contacts with city officials in a 90-day period.

But business groups were seeking more changes, especially the removal of an exemption for many non-profits. They contend labor unions and their allies have used this exemption as a loophole to avoid having to register their top officials as lobbyists.

"Everyone should be treated the same," said Carol Schatz, chief executive of the Central City Association, which represents downtown L.A. business interests.

The City Ethics Commission voted last week to approve the revisions and send them on to the City Council, which is expected to take them up after the August summer recess.

Staff reporter Howard Fine can be reached at hfine@labusinessjournal.com or at (323) 549-5225, ext. 227.

For reprint and licensing requests for this article, CLICK HERE.