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CALIFORNIA LEGISLATURE—
2013–2014 REGULAR SESSION

Introduced by Assembly Member Patterson |

February 21, 2014 |

An act to amend Section 6591.5 of the Revenue and Taxation Code, relating to taxation.

AB 2429, as introduced, Patterson.
State Board of Equalization: administration: interest.

The Sales and Use Tax Law, and other laws administered by the State Board of Equalization, by reference to that law, including the Bradley-Burns Uniform Local Sales and Use Tax law and local taxes collected pursuant to the procedures of the Transactions and Use Tax Law, provide that interest is paid by taxpayers and feepayers with respect to underpayments of various taxes, surcharges, and fees at a modified adjusted rate per annum, as defined by reference to a specified federal statute, and that interest is paid to taxpayers and feepayers with respect to overpayments of various taxes, surcharges, and fees as determined in accordance with a specified federal statute, which requires that the rate paid on overpayments be based on the rate of 13-week treasury bills, as specified.

This bill would
revise the definition of “modified adjusted rate per annum,” to require that interest on overpayments be determined in the same manner as interest on underpayments is now determined.

~~(a)(1)For interest required to be paid to the state upon underpayments of tax to the state, “ modified adjusted rate per annum” means the adjusted annual rate established pursuant to subdivision (c), plus three percentage points.~~

~~(2)For interest required to be paid by the state upon overpayments of tax, “modified adjusted rate per annum” means the adjusted annual rate established pursuant to subdivision (d).~~

~~(b)“Modified adjusted rate per month, or fraction thereof” means the modified adjusted rate per annum divided by 12.~~

~~(c)The~~

(1) The rate for January shall apply for the following July 1 to December 31, inclusive.

(2) The rate for July shall apply for the following January 1 to June 30, inclusive.

~~(d)(1)Except as provided in paragraph (2), the rate established for interest to be paid by the state upon overpayments of tax shall be equal to the bond equivalent rate of 13-week treasury bills auctioned, rounded to the nearest full percent (or if a multiple of one-half of 1 percent, the rate shall be increased to the next highest full percent), as follows:~~

~~(A)The bond equivalent rate of 13-week treasury bills established at the first auction held during the month of January shall apply for the following July 1 to December 31, inclusive.~~

~~(B)The bond equivalent rate of 13-week treasury bills established at the first auction held during the month of July shall apply for the following January 1 to June 30, inclusive.~~

~~(2)For the period July 1, 1991, through June 30, 1992, the rate to be paid by the state upon overpayments of tax shall be equal to the bond equivalent rate of 13-week treasury bills established at the auction held on July 1, 1991, rounded to the nearest full percent (or if a multiple of one-half of 1 percent, the rate shall be increased to the next highest full percent).~~

~~(e)~~

(b) “Modified adjusted rate per month, or fraction thereof” means the modified adjusted rate per annum divided by 12.