AB 1183, as introduced, Wilk. Sales and use taxes: deficiencies: judgment of dissolution of marriage.
Existing sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state.
Existing law also sets forth the liability of marital property that is held as community property, including providing that the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.
This bill would, notwithstanding those laws governing the liability of marital property, relieve a spouse of an unpaid sales or use tax or deficiency of that tax, if the other spouse has the sole obligation arising from a judgment of dissolution of marriage to pay the unpaid tax or a deficiency, or any portion of either.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 6456 of the Revenue and Taxation Code
2 is amended to read:
(a) Under regulations prescribed by the board, if:
4(1) A tax liability under this part was understated by a failure
5to file a return required to be filed under this part, by the
6omission of an amount properly includable therein, or by
7erroneous deductions or credits claimed on a return, and the
8understatement of tax liability is attributable to one spouse; or
9any amount of the tax reported on a return was unpaid and the
10nonpayment of the reported tax liability is attributable to one
11spouse,
12(2) The other spouse establishes that he or she did not know
13of, and had no reason to know
of, that understatement or
14nonpayment, and
15(3) Taking into account whether or not the other spouse
16significantly benefited directly or indirectly from the
17understatement or the nonpayment and taking into account all
18other facts and circumstances, it is inequitable to hold the other
19spouse liable for the deficiency in tax attributable to that
20understatement or nonpayment,
21then the other spouse shall be relieved of liability for tax (including
22interest, penalties, and other amounts) to the extent that the liability
23is attributable to that understatement or nonpayment of tax.
24(b) For purposes of this section, the determination of the spouse
25to whom items of understatement or nonpayment are attributable
26shall be made without regard to community property laws.
27(c) This section shall apply to all calendar quarters subject to
28the provisions of this part, but shall not apply to any calendar
29quarter that is more than five years from the final date on the
30board-issued determination, five years from the return due date
31for nonpayment on a return, or one year from the first contact with
32the spouse making a claim under this section; or that has been
33closed by res judicata, whichever is later.
34(d) For purposes of paragraph (2) of subdivision (a), “reason to
35know” means whether or not a reasonably prudent person would
36have had reason to know of the understatement or nonpayment.
37(e) For purposes of this section, with respect to a failure to file
38a return or an omission of an item from the return, “attributable to
P3 1one spouse” may be determined by whether a spouse rendered
2substantial
service as a retailer of taxable items to which the
3understatement is attributable. If neither spouse rendered substantial
4services as a retailer, then the attribution of applicable items of
5understatement shall be treated as community property. An
6erroneous deduction or credit shall be attributable to the spouse
7who caused that deduction or credit to be entered on the return.
8(f) Under procedures prescribed by the board, if, taking into
9account all the facts and circumstances, it is inequitable to hold
10the other spouse liable for any unpaid tax or any deficiency (or
11any portion of either) attributable to any item for which relief is
12not available under subdivision (a), the board may relieve the other
13spouse of that liability.
14(g) Notwithstanding Part 3 (commencing with Section 900) of
15Division 4 of
the Family Code, if a spouse has the sole legal
16obligation to pay the unpaid tax or a deficiency, or any portion of
17either, the other spouse shall be relieved of that unpaid tax or
18deficiency. For purposes of this subdivision, a legal obligation
19means an obligation arising from a judgment of dissolution of
20marriage.
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