BILL ANALYSIS Ó
AB 1856
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1856 (Dababneh) - As Amended April 6, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows a taxpayer making installment payments on an
outstanding liability on taxes administered by the Board of
Equalization (BOE) to file a single claim for refund to cover
all prior overpayments and all subsequent overpayments. In
summary, this bill:
AB 1856
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1)For cases in which the amount of tax, surcharge, or fee
determined has not been paid in full, a properly filed claim
for refund shall be deemed timely for all overpayments within
its statute of limitations, and for all subsequent payments
applied to that determination.
2)Provides that the provisions of this bill only apply to claims
for refund filed on or after its effective date.
3)Applies to payment or prepayment of tax, fee, or surcharge
imposed pursuant to the Sales and Use Tax (SUT) Law, the Use
Fuel Tax Law, the Cigarette and Tobacco Products Tax Law, the
Alcoholic Beverage Tax Law, the Energy Resources Surcharge
Law, the Emergency Telephone Users Surcharge Act, the
Hazardous Substances Tax Law, the Integrated Waste Management
Fee Law, the Oil Spill Response, Prevention, and
Administration Fees Law, the Underground Storage Tank
Maintenance Fee Law, and the Diesel Fuel Tax Law, and for
taxes and fees imposed in accordance with the Fee Collection
Procedures Law.
FISCAL EFFECT:
Minor revenue loss due to refunds given to taxpayers that are
currently barred by statute.
COMMENTS:
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1)Background. Taxpayers have a number of options to appeal a
determination of unpaid tax liability. The first option is to
file a timely petition for redetermination. In cases where
taxpayers miss the deadline to file a petition, the other
option is to pay the taxes owed and then file a claim for
refund. For taxpayers repaying the tax in installments, a
refund claim for each payment is accepted as an "informal
claim for refund." This informal claim delays the expiration
of the statute of limitations and protects the taxpayer's
right to appeal to the BOE in future years. The BOE notes that
this informal claim is "perfected" and considered filed when
the full amount due has been paid. After then, the BOE takes
take formal action to either allow the claim or deny the
refund claim in whole or in part.
According to the sponsor, BOE, in some instances the taxpayer
is not aware of the requirement to file a refund claim
following each installment payment. In these cases, the
taxpayer believes that they must file a refund claim after
paying the tax in full following the final installment. By
this time, the statute of limitations prevents the taxpayer
from recovering all of their payments.
2)Purpose. According to the author, AB 1856 will provide
equitable relief for taxpayers who would be barred from
receiving a refund for one or more installment payments
because they did not file a timely claim for refund for each
individual payment.
Prepared by:Luke Reidenbach / APPR. / (916)
319-2081
AB 1856
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