Bill Text: CA SB640 | 2015-2016 | Regular Session | Amended
Bill Title: Sales and use taxes: claim for refund: customer refunds.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Failed) 2016-11-30 - From Assembly without further action. [SB640 Detail]
Download: California-2015-SB640-Amended.html
BILL NUMBER: SB 640 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 18, 2015
AMENDED IN SENATE JUNE 2, 2015
AMENDED IN SENATE APRIL 21, 2015
INTRODUCED BY Senator Beall
(Coauthor: Senator Vidak)
(Coauthor: Assembly Member Low)
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 amended, 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 allow
the customer the right to file a claim for
refund to receive the amount that would be refunded to the
person, person that paid the tax provided
specified conditions are met, including that the amount be $1,000 or
more. This bill would authorize require
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:
(1) Any amount of tax, interest, or penalty was not required to be
paid.
(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.
(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 shall have 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 single person that paid the tax to a
single customer under Section 6901.5.
(B) The amount to be refunded is one thousand dollars ($1,000) 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.
(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.
(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.
(e) As used in this section, the following definitions shall
apply:
(1) "Person that paid the tax" means a single "person" as defined
in Section 6005.
(2) "Customer" means a single "person" as defined by Section 6005.
