BILL NUMBER: SB 884 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 16, 2010
AMENDED IN SENATE APRIL 22, 2010
AMENDED IN SENATE APRIL 12, 2010
INTRODUCED BY Senator Ashburn
(Coauthor: Senator Runner)
JANUARY 19, 2010
An act to amend Sections 6225, 6459, and 6592 of, and to add
Sections 6225.1 and 6225.2 to, the Revenue and Taxation Code,
relating to taxation, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 884, as amended, Ashburn. Sales and use taxes: use tax:
administration.
The Sales and Use Tax Law imposes a tax on the gross receipts from
the sale in this state of, or the storage, use, or other consumption
in this state of, tangible personal property. In order to facilitate
the collection of the use tax, a qualified purchaser, as defined, is
required to register with the State Board of Equalization and to
report and pay by April 15 the use tax owed for the previous calendar
year, as provided.
This bill , for reporting periods commencing on and after
January 1, 2010, would revise the above requirements to
instead require a qualified purchaser that is subject
to the tax imposed by the Personal Income Tax Law to file a return
for use tax by April 15, following the close of the calendar year,
and to file a return made on the basis of a fiscal year by the 15th
day of the 4th month following the close of the fiscal year. The bill
would require a qualified purchaser that is subject to the tax
imposed by the Corporation Tax Law to file a return for use tax by
March 15, following the close of the calendar year, and to file a
return filed on the basis of the fiscal year by the 15th day of the
3rd month following the close of the fiscal year. The bill would
authorize the board to grant a reasonable extension of time for
filing a return, as specified, and to grant a reasonable extension of
time for the payment of tax when it determines that good cause
exists, would authorize a refund of penalties paid with respect to
reporting periods in 2007, 2008, and 2009, and would delay the
imposition of any authorized penalties for qualified purchasers until
on or after March 16, 2011 provider that a qualified
purchaser is subject to other related provisions governing returns
and payments and would authorize the board, for the 2009 calendar
year reporting period only, to grant a reasonable extension of time
for filing a return when it determines that good cause exists
pursuant to these provisions. The bill would prohibit a
penalty from being imposed on a qualified purchaser's failure to
timely remit use tax for reporting periods in 2007, 2008, and 2009,
if the qualified purchaser remits payment of the use tax attributable
to those periods on or before March 15, 2011. The bill would also
require the board to refund any penalty paid with respect to those
taxes, as prescribed, provided that the qualified purchaser has paid
all use tax liability for those reporting periods on or before March
15, 2011 . The bill would declare that its provisions and
retroactive application serve a public purpose, as specified.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6225 of the Revenue and Taxation Code is
amended to read:
6225. (a) In order to facilitate the collection of use tax
imposed by this part, a qualified purchaser shall register with the
board on a form prescribed by the board and shall set forth the name
under which the qualified purchaser transacts or intends to transact
business, the location of the qualified purchaser's place or places
of business, and other information that the board may require.
(b) (1) Article 1 (commencing with Section
6451) of Chapter 5 of this part shall apply to a qualified purchaser,
except that a return showing the total sales price of the tangible
personal property purchased by the qualified purchaser, the storage,
use, or other consumption of which became subject to the use tax
during the preceding calendar year, and which was not paid to a
retailer required to collect the tax or which was not paid to a
retailer the qualified purchaser reasonably believed was required to
collect the tax, shall be filed, together with a remittance of the
amount of the tax due, with the board in accordance with
paragraphs (1) and (2). on or before April 15.
(1) For a qualified purchaser subject to the tax imposed by Part
10 (commencing with Section 17001), a return filed pursuant to this
section on the basis of the calendar year shall be filed on or before
April 15, following the close of the calendar year. A return made on
the basis of a fiscal year shall be filed on or before the 15th day
of the fourth month following the close of the fiscal year.
(2) For a qualified purchaser subject to the tax imposed by Part
11 (commencing with Section 23001), a return filed pursuant to this
section on the basis of the calendar year shall be filed on or before
March 15, following the close of the calendar year. A return made on
the basis of the fiscal year shall be filed on or before the 15th
day of the third month following the close of the fiscal year.
(2) For reporting periods on or after January 1, 2010, Article 1
(commencing with Section 6451) of Chapter 5 of this part shall apply
to a qualified purchaser, except that a return showing the total
sales price of the tangible personal property purchased by the
qualified purchaser, the storage, use, or other consumption of which
became subject to the use tax during the preceding calendar year, and
which was not paid to a retailer required to collect the tax or
which was not paid to a retailer the qualified purchaser reasonably
believed was required to collect the tax, shall be filed, together
with a remittance of the amount of the tax due, with the board.
(c) A "qualified purchaser" means a person that meets all of the
following conditions:
(1) The person is not required to hold a seller's permit pursuant
to this part.
(2) The person is not required to be registered pursuant to
Section 6226.
(3) The person is not a holder of a use tax direct payment permit
as described in Section 7051.3.
(4) The person receives at least one hundred thousand dollars
($100,000) in gross receipts from business operations per calendar
year.
(5) The person is not otherwise registered with the board to
report use tax.
(d) "Fiscal year" means an accounting period of 12 months ending
on the last day of any month other than December.
(e)
(d) This section shall not apply to the purchase of a
vehicle, vessel, or aircraft as defined in Article 1 (commencing with
Section 6271) of Chapter 3.5 of this part.
SEC. 2. Section 6225.1 is added to the Revenue and Taxation Code,
to read:
6225.1. (a) For a return required to be filed for the 2009
calendar year only, for purposes of administering Section 6225,
the board may grant a reasonable extension of time for filing a
return in the manner and form it determines.
(1) For a qualified purchaser subject to the tax imposed by Part
10 (commencing with Section 17001), except for a qualified purchaser
residing or traveling abroad, an extension of time shall not be
granted for more than six months. For a qualified purchaser residing
or traveling abroad, a return shall be filed no later than the 15th
day of the sixth month following the close of the taxable year,
unless the requirements for an extension have been fulfilled on or
before that date.
(2) For a qualified purchaser subject to the tax imposed by Part
11 (commencing with Section 23001) no extension or extensions shall
aggregate more than seven months from the due date for filing the
return.
(b) An extension of time granted pursuant to this section is not
an extension of time for payment of the tax required to be paid on or
before the due date of the return without regard to extension.
Penalties and interest shall be imposed, as provided by law, without
regard to any extension granted under this section.
(c) A reasonable extension for payment of tax required by Section
6225 may be granted by the board whenever in its judgment good cause
exists.
SEC. 3. Section 6225.2 is added to the Revenue and Taxation Code,
to read:
6225.2. A penalty shall not be imposed on a qualified purchaser's
failure to timely remit use tax for reporting periods in 2007, 2008,
and 2009 unless the qualified purchaser fails to remit payment of
the use tax attributable to those periods on or before March 15,
2011. Notwithstanding Section 6902, any penalty paid to the board
with respect to use tax due for reporting periods in 2007, 2008, and
2009 shall be refunded to the qualified purchaser, as promptly as
feasible, provided that the qualified purchaser has paid
all use tax liability for those reporting periods on or before March
15, 2011. This section shall not preclude the board from making any
determinations for understatements of use tax against the qualified
purchaser in accordance with Chapter 5 (commencing with Section
6451).
SEC. 4. Section 6459 of the Revenue and Taxation Code is amended
to read:
6459. (a) Except as provided in Section 6225.1, the board for
good cause may extend for not to exceed one month the time for making
any return or paying any amount required to be paid under this part.
The extension may be granted at any time provided a request therefor
is filed with the board within or prior to the period for which the
extension may be granted.
Any person to whom an extension is granted shall pay, in addition
to the tax, interest at the modified adjusted rate per month, or
fraction thereof, established pursuant to Section 6591.5, from the
date on which the tax would have been due without the extension until
the date of payment.
(b) The board may grant an extension for more than one month if
both of the following conditions occur:
(1) A budget for the state has not been adopted by July 1.
(2) The person requesting the extension is a creditor of the state
who has not been paid because of the state's failure to timely adopt
a budget.
Any extension granted under this subdivision shall expire no later
than the last day of the month following the month in which the
budget is adopted or one month from the due date of the return or
payment, whichever comes later.
Any person to whom an extension has been granted under this
subdivision shall pay, in addition to the tax, interest at the
modified adjusted rate per month, or fraction thereof, established
pursuant to Section 6591.5, from the date on which the tax would have
been due without the extension until the date of payment. However,
no interest shall be due on that portion of the payment equivalent to
the amount due to the person from the state on the due date of the
payment.
SEC. 5. Section 6592 of the Revenue and Taxation Code is amended
to read:
6592. (a) Except as provided in Section 6225.2, if the board
finds that a person's failure to make a timely return or payment is
due to reasonable cause and circumstances beyond the person's
control, and occurred notwithstanding the exercise of ordinary care
and the absence of willful neglect, the person shall be relieved of
the penalties provided by Sections 6476, 6477, 6479.3, 6480.4,
6480.8, 6511, 6565, 6591, 7051.2, 7073, and 7074.
(b) Except as provided in subdivision (c) any person seeking to be
relieved of the penalty shall file with the board a statement under
penalty of perjury setting forth the facts upon which he or she bases
his or her claim for relief.
(c) The board shall establish criteria that provides for efficient
resolution of requests for relief pursuant to this section.
SEC. 6. The Legislature finds and declares that this act and its
retroactive application are necessary to serve a public purpose by
ensuring the fair and equitable treatment of taxpayers.
SEC. 7. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to address problems relating to administration and
collection of the use tax and to prevent undue hardship to taxpayers,
it is necessary that this act take effect immediately.