BILL ANALYSIS Ó
AB 1412
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Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
AB 1412 (Committee on Revenue and Taxation) - As Introduced:
March 19, 2013
Majority vote. Fiscal committee.
SUBJECT : Sales and use taxes: claim for refund: customer
refunds
SUMMARY : Authorizes a person to irrevocably assign to a
customer the right to receive a refund under the Sales and Use
Tax (SUT) Law, provided specified conditions are met.
Specifically, this bill authorizes a person (i.e., a retailer)
to make an irrevocable election to assign to a customer the
right to receive a SUT refund if all of the following conditions
are met:
1)The amount represents excess tax reimbursement that must be
paid by the person to the customer under existing law;
2)The irrevocable election to assign to the customer the amount
refunded is evidenced by a statement signed by the person and
the customer authorizing the named customer to receive the
amount refunded; and,
3)The signed statement is submitted to the State Board of
Equalization (BOE) in conjunction with the person's claim for
refund.
EXISTING LAW :
1)Imposes a sales tax on retailers for the privilege of selling
tangible personal property (TPP), absent a specific exemption.
The tax is based upon the retailer's gross receipts from TPP
sales in this state.
2)Imposes a complementary use tax on the storage, use, or other
consumption in this state of TPP purchased from any retailer.
The use tax is imposed on the purchaser, and unless the
purchaser pays the use tax to a retailer registered to collect
the California use tax, the purchaser remains liable for the
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tax, unless the use is exempted. The use tax is set at the
same rate as the state's sales tax and must generally be
remitted to the BOE.
3)Provides that any amount collected or paid in excess of what
is due under the SUT Law must be credited by the BOE against
any other amounts due from the person from whom the excess
amount was collected or by whom it was paid, and the balance
refunded, as specified.
4)Provides that, when an amount represented to a customer as SUT
reimbursement is computed upon an amount that is not taxable
or is in excess of the taxable amount and is actually paid by
the customer, the amount paid must be returned to the customer
upon notification by the BOE or by the customer that this
excess has been ascertained.
FISCAL EFFECT : Unknown.
COMMENTS :
1)An overview of current law : Revenue and Taxation Code Section
6901 currently requires the BOE to refund any overpayment of
use tax directly to the purchaser, even though the retailer
collected and remitted the tax. While this statute allows the
BOE to refund excess use tax directly to a purchaser, the BOE
may currently issue a refund for excess sales tax
reimbursement only to the retailer that collected and reported
the tax.
2)What would this bill do? : This bill authorizes a retailer to
irrevocably assign to a customer the right to receive a refund
of excess sales tax reimbursement, provided certain conditions
are met. Specifically, the retailer and the customer would
need to sign the irrevocable assignment and submit it to the
BOE with the retailer's claim for refund. This, in turn,
would allow the BOE to directly refund the customer who paid
the excess tax.
3)Working with the BOE : At the January 15, 2013 BOE Legislative
Committee Meeting, the BOE members unanimously voted to
sponsor a proposal to authorize a direct refund of excess
sales tax reimbursement in the amount of $300,000 or more to a
single customer. The BOE's staff analysis notes that the
absence of this threshold could result in certain
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administrative complications. The author's office is engaged
in ongoing conversations with BOE staff to resolve these
issues.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098