BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 1412
Author: Assembly Revenue and Taxation Committee
Amended: 7/10/13 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 7/3/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/30/13 - See last page for vote
SUBJECT : Sales and use taxes: claim for refund: customer
refunds
SOURCE : Board of Equalization
DIGEST : This bill authorizes a person to make an irrevocable
election to assign to a customer the right to receive a refund
under the Sales and Use Tax (SUT) Law, provided specified
conditions are met.
ANALYSIS :
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.
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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 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 Board of Equalization (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.
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 entire amount represents excess tax reimbursement that
must be paid by the person to a single customer under
existing law.
2. The refund amount is $50,000 or greater.
3. The election is irrevocable.
4. Contingency fees are not charged or paid in connection with
the election, assignment, or claim for fraud.
5. 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.
6. The signed statement is submitted to the BOE in conjunction
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with the person's claim for refund.
7. The signed statement shall be made on a form prescribed by
the board, which shall include a statement that a contingency
fee charged or paid in connection with the election,
assignment, or claim for refund is contrary to public policy
and any contingency fee charged or paid shall render the
assignment null and void.
Comments
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/20/13)
Board of Equalization (source)
OPPOSITION : (Verified 8/20/13)
California Society of CPAs
Consumer Attorneys of California
Easley, McCaleb & Associates, Inc.
Paramount Property Tax Appeal
ASSEMBLY FLOOR : 78-0, 5/30/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas,
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Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Holden, Vacancy
AB:d 8/10/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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