BILL NUMBER: SB 801 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 27, 2005
AMENDED IN SENATE APRIL 20, 2005
AMENDED IN SENATE MARCH 29, 2005
INTRODUCED BY Senator Simitian
FEBRUARY 22, 2005
An act to amend Sections 6476 and 6701 of, and to add Sections
6452.2 and 6471.1 to, the Revenue and Taxation Code, relating to
taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 801, as amended, Simitian. Sales and use taxes: prepayments:
returns.
The Sales and Use Tax Law, which is administered by the State
Board of Equalization, imposes a tax on the gross receipts from the
sale in this state of, or the storage, use, or other consumption in
this state of, tangible personal property. That law generally
requires a sales and use tax return, with a remittance of the taxes
owed, to be filed with the board on a quarterly basis. That law
provides that, under specified circumstances, the board may require
any person whose sales and use tax liability exceeds a specified
amount to prepay that tax liability.
This bill would require authorize a
person that has only one retail location in this state that generates
an estimated monthly tax liability of less than $17,000
$4,000 to file a sales and use tax return on a
yearly basis and to make quarterly prepayments, upon approval by
the board, as specified. Additionally, this bill would
provide that the board may, by written notice, require a retailer to
file quarterly returns in lieu of filing prepayments and yearly
returns, as specified.
Existing law provides that a person required to make a prepayment
and who fails to do so is subject to a penalty.
This bill would extend the penalty application to retailers
required to file a sales and use tax return on a yearly basis that
are also required to make quarterly prepayments.
The Sales and Use Tax Law authorizes the State Board of
Equalization to require taxpayers to post security whenever the board
deems it necessary to insure payment of taxes due, according to
specific formulas.
This bill would allow the board to include the estimated liability
of persons required to make quarterly prepayments when determining
the security amount that is required to be posted.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6452.2 is added to the Revenue and Taxation
Code, to read:
6452.2.
(a) Notwithstanding Section 6451 or 6452, a retailer
described in Section 6471.1 , shall, no later than
one month following the close of each calendar year, file a return
for that calendar year with the board in the form as prescribed by
the board. Returns shall be authenticated in a form or pursuant to
methods as may be prescribed by the board.
(b) For purposes of the sales tax, a return shall be filed by
every retailer that is liable for the sales tax under this part. For
purposes of the use tax, a return shall be filed by every retailer
engaged in business in this state that has not paid the use tax due
to a retailer required to collect the tax.
(c) Any retailer who fails or refuses to furnish any return
required to be made, or who fails or refuses to furnish a
supplemental return or other data required by the board, is guilty of
a misdemeanor punishable as provided in Section 7153.
SEC. 2. Section 6471.1 is added to the Revenue and Taxation Code,
to read:
6471.1.
(a) Notwithstanding Section 6451 or 6470 , a retailer
described in subdivision (b) that was engaged in the same business
during the entire preceding calendar year, or a person who is a
successor to a business that was in operation during the entire
preceding calendar year, shall make a prepayment each quarter for the
taxes imposed by this part on or before the last day of the month
following the close of each calendar quarter. The prepayments for
each quarterly period shall be in an amount equal to the amount of
gross receipts that were subject to the taxes imposed by this part
for that same calendar quarter in the prior calendar year multiplied
by the state and local tax rate in effect during the calendar quarter
for which the prepayment is made or shall be in an amount equal to
the state and local tax liability for the quarterly period for which
the prepayment is due.
(b) A retailer shall make quarterly prepayments as required by
subdivision (a) if that retailer meets both of the following
(b) Subdivision (a) shall apply to a
retailer that meets all of the following conditions:
(1) The retailer submits a written request to the board to allow
the retailer to make prepayments in accordance with this section and
file returns pursuant to Section 6452.2.
(2) The board approves the retailer's request and issues a written
notification to that retailer.
(1)
(3) The retailer's estimated measure of liability under
this part averages not less than one thousand four hundred dollars
($1,400) and not more than sixteen thousand nine hundred and
ninety-nine dollars ($16,999) four thousand dollars
($4,000) per month.
(2)
(4) The retailer has only one business location in
this state that is engaged in making retail sales of tangible
personal property.
(c) A retailer described in subdivision (b) that is
required to file returns pursuant to Section 6452.2 shall continue to
file as required under these sections until notified otherwise by
the authorized to make prepayments pursuant to this
section shall continue to make those prepayments and file a return as
required under Section 6452.2 until notified otherwise by
the board.
(d) This section shall not apply to any person required to make
prepayments pursuant to Article 1.5 (commencing with Section 6480) or
to any other person for which the board determines that the retailer'
s remittance of prepayments pursuant to this section would not be in
the best interests of the state.
(e) When the board determines it is necessary for the efficient
administration of this part, the board may, by written notice,
require any retailer, in lieu of filing prepayments in accordance
with this section and filing a return pursuant to Section 6452.2, to
file quarterly returns pursuant to Section 6452.
SEC. 3. Section 6476 of the Revenue and Taxation Code is amended
to read:
6476.
Any person required to make a prepayment pursuant to Section 6471
or Section 6471.1 who fails to make a timely prepayment but makes
such prepayment before the last day of the monthly period following
the quarterly period in which the prepayment became due, shall also
pay a penalty of 6 percent of the amount of prepayment.
SEC. 4. Section 6701 of the Revenue and Taxation Code is amended
to read:
6701.
The board, whenever it deems it necessary to ensure compliance
with this part, may require any person subject thereto, to place with
it any security that the board may determine. Any security in the
form of cash, government bonds, or insured deposits in banks or
savings and loan institutions shall be held by the board in trust to
be used solely in the manner provided by this section and Section
6815. The amount of the security shall be fixed by the board but,
except as noted below, shall not be greater than twice the estimated
average liability of persons filing returns for quarterly periods or
three times the estimated average liability of persons required to
file returns for monthly periods or the estimated liability of
persons required to file returns for calendar year periods and make
quarterly prepayments, determined in the manner that the board deems
proper, or fifty thousand dollars ($50,000), whichever amount is the
lesser. In case of a person who, pursuant to Section 6070 of this
part, has been given notice of hearing to show cause why his or her
permit or permits should not be revoked, or a person whose permit or
permits has been revoked or suspended, the amount of the security
shall not be greater than three times the average liability of
persons filing returns for quarterly periods or five times the
average liability of persons required to file returns for monthly
periods or twice the estimated liability of persons required to file
calendar year returns and make quarterly prepayments, or fifty
thousand dollars ($50,000), whichever amount is the lesser. The
limitations herein provided apply regardless of the type of security
placed with the board. The amount of the security may be increased or
decreased by the board subject to the limitations herein provided.
Security held by the board shall be released after a three-year
period in which the person has filed all returns and paid all tax to
the state or any amount of tax required to be collected and paid to
the state within the time required. The board may sell the security
at public auction if it becomes necessary to do so in order to
recover any tax or any amount required to be collected, interest, or
penalty due. Notice of the sale may be served upon the person who
placed the security personally or by mail; if by mail, service shall
be made in the manner prescribed for service of a notice of a
deficiency determination and shall be addressed to the person at his
or her address as it appears in the records of the board. Upon any
sale any surplus above the amounts due shall be returned to the
person who placed the security.