BILL NUMBER: SB 640 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Beall
FEBRUARY 27, 2015
An act to amend Section 6901 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
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 1. Section 6901 of the Revenue and Taxation Code is
amended to read:
6901. (a) If the board determines that any
amount, penalty, or interest has been paid more than once or has been
erroneously or illegally collected or computed, the board shall set
forth that fact in the records of the board and shall certify the
amount collected in excess of the amount legally due and the person
from whom it was collected or by whom paid. The excess amount
collected or paid shall be credited by the board on any amounts then
due and payable from the person from whom the excess amount was
collected or by whom it was paid under this part, and the balance
shall be refunded to the person, or his or her successors,
administrators, or executors, or customers, as provided in
subdivision (b), if a determination by the board is made in any
of the following cases:
(a)
(1) Any amount of tax, interest, or penalty was not
required to be paid.
(b)
(2) Any amount of prepayment of sales tax, interest, or
penalty paid pursuant to Article 1.5 (commencing with Section 6480)
of Chapter 5 was not required to be paid.
(c)
(3) Any amount that is approved as a settlement
pursuant to Section 7093.5.
(b) (1) When an amount represented by a person to a customer as
constituting reimbursement for taxes due under this part is computed
upon an amount that is not legally due, that is paid by the customer
to the person, and that is remitted by the person to the board, the
person that paid the tax may make an irrevocable election to assign
to the customer the right to file a claim for refund and receive the
amount refunded if all of the following conditions are met:
(A) The entire amount represents excess tax reimbursement that is
required to be paid by the person to a single customer under Section
6901.5.
(B) The amount to be refunded is fifty thousand dollars ($50,000)
or more.
(C) The irrevocable election to assign to the customer the right
to file a claim for refund and receive the amount refunded is
evidenced by a statement, signed by the person and the customer, that
authorizes that customer to file a claim for refund and receive the
amount refunded.
(D) The signed statement is submitted to the board in conjunction
with the claim for refund.
(2) The person that paid the tax and collected the excess tax
reimbursement shall make the records to verify the refund available
for inspection by the board, and no refund shall be payable until the
board verifies by audit or other means that the amounts are properly
due for refund.
(3) The excess amount collected or paid shall be credited by the
board on any amounts then due and payable from the person that paid
the tax or amounts for which a notice of determination has been
issued to the person that paid the tax, and amounts due and payable
from the customer from which the excess tax reimbursement was
collected. The balance shall be refunded to the customer that paid
the excess tax reimbursement. An amount subject to refund that is
credited to the person that paid the tax and not refunded to the
customer that paid the excess tax reimbursement shall be paid by the
person that paid the tax directly to the customer. In the event the
person does not make that payment, the credit that was on the amount
due from the person shall be reversed.
Any
(c) Any overpayment of the use
tax by a purchaser to a retailer who is required to collect the tax
and who gives the purchaser a receipt therefor pursuant to Article 1
(commencing with Section 6201) of Chapter 3 shall be credited or
refunded by the state to the purchaser. Any
(d) Any proposed determination by
the board pursuant to this section with respect to an amount in
excess of fifty thousand dollars ($50,000) shall be available as a
public record for at least 10 days prior to the effective date of
that determination.