SB 640, as introduced, Beall. Sales and use taxes: claim for refund: customer refunds.
Under the Sales and Use Tax Law, any amount collected or paid in excess of what is due under that law is required to be credited by the State Board of Equalization against any other amounts due and payable from the person from whom the excess amount was collected or by whom it was paid, and the balance refunded to the person, as provided. Under existing law, when an amount represented by a person to a customer as constituting reimbursement for taxes due under the Sales and Use Tax Law is computed upon an amount that is not taxable or is in excess of the taxable amount and is actually paid by the customer to the person, the amount paid is required to be returned by the person to the customer upon notification by the board or by the customer that this excess has been ascertained.
This bill would authorize a person that has paid the tax to make an irrevocable election to assign to the customer the right to file a claim for refund to receive the amount that would be refunded to the person, provided specified conditions are met, including that the amount be $50,000 or more. This bill would authorize the board to make a payment to the customer of the balance of any excess amount collected or paid, after any amounts due and payable from the person or customer are credited against that excess amount. This bill would also require an amount subject to refund that is credited to the person that paid the tax and not refunded to the customer to be paid by that person directly to the customer.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 6901 of the Revenue and Taxation Code
2 is amended to read:
begin insert(a)end insertbegin insert end insert If the board determines that any amount, penalty,
4or interest has been paid more than once or has been erroneously
5or illegally collected or computed, the board shall set forth that
6fact in the records of the board and shall certify the amount
7collected in excess of the amount legally due and the person from
8whom it was collected or by whom paid. The excess amount
9collected or paid shall be credited by the board on any amounts
10then due and payable from the person from whom the excess
11amount was collected or by whom it was paid under this part, and
12the balance shall be
refunded to the person, or his or her successors,
13administrators, or executors,begin insert or customers, as provided in
14subdivision (b),end insert if a determination by the board is made in any of
15the following cases:
16(a)
end delete
17begin insert(1)end insert Any amount of tax, interest, or penalty was not required to
18be paid.
19(b)
end delete
20begin insert(2)end insert Any amount of prepayment of sales tax, interest, or penalty
21paid pursuant to Article 1.5 (commencing with Section 6480) of
22Chapter 5 was not required to be paid.
23(c)
end delete
24begin insert(3)end insert Any amount that is approved as a settlement pursuant to
25Section 7093.5.
26(b) (1) When an amount represented by a person to a customer
27as constituting reimbursement for taxes due under this part is
28computed upon an amount that is not legally due, that is paid by
29the customer to the person, and that is remitted by the person to
30
the board, the person that paid the tax may make an irrevocable
31election to assign to the customer the right to file a claim for refund
32and receive the amount refunded if all of the following conditions
33are met:
P3 1(A) The entire amount represents excess tax reimbursement that
2is required to be paid by the person to a single customer under
3Section 6901.5.
4(B) The amount to be refunded is fifty thousand dollars
5($50,000) or more.
6(C) The irrevocable election to assign to the customer the right
7to file a claim for refund and receive the amount refunded is
8evidenced by a statement, signed by the person and the customer,
9that authorizes that customer to file a claim for refund and receive
10the amount refunded.
11(D) The signed statement is submitted to the board in
12conjunction with the claim for refund.
13(2) The person that paid the tax and collected the excess tax
14reimbursement shall make the records to verify the refund available
15for inspection by the board, and no refund shall be payable until
16the board verifies by audit or other means that the amounts are
17properly due for refund.
18(3) The excess amount collected or paid shall be credited by
19the board on any amounts then due and payable from the person
20that paid the tax or amounts for which a notice of determination
21has been issued to the person that paid the tax, and amounts due
22and payable from the customer from which the excess tax
23reimbursement was collected. The balance shall be refunded to
24the customer that paid the excess tax
reimbursement. An amount
25subject to refund that is credited to the person that paid the tax
26and not refunded to the customer that paid the excess tax
27reimbursement shall be paid by the person that paid the tax directly
28to the customer. In the event the person does not make that
29payment, the credit that was on the amount due from the person
30shall be reversed.
31 Any
end delete
32begin insert(c)end insertbegin insert end insertbegin insertAnyend insert overpayment of the use tax by a purchaser to a retailer
33who is required to collect the tax and who gives the purchaser a
34receipt therefor pursuant to
Article 1 (commencing with Section
356201) of Chapter 3 shall be credited or refunded by the state to the
36purchaser.begin delete Anyend delete
37begin insert(d)end insertbegin insert end insertbegin insertAnyend insert proposed determination by the board pursuant to this
38section with respect to an amount in excess of fifty thousand dollars
P4 1($50,000) shall be available as a public record for at least 10 days
2prior to the effective date of that determination.
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