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AB-1566 Sales and use taxes: underpayments: overpayments.(2017-2018)

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Date Published: 04/07/2017 04:00 AM
AB1566:v98#DOCUMENT

Amended  IN  Assembly  April 06, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1566


Introduced by Assembly Member Irwin

February 17, 2017


An act to amend Section 6901 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 1566, as amended, Irwin. Sales and use taxes: underpayments: overpayments.
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from those taxes. Existing law requires that 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.
This bill, notwithstanding any other law, would authorize require the board, on and after January 1, 2018, and before January 1, 2023, to credit and set off setoff underpayment of taxes barred by the statute of limitations, provided a specified condition is met, in one quarter against an overpayment of taxes in another quarter within the same calendar year, if both the set off and overpayment occurred during the same period put at issue by the taxpayer’s claim to refund. The bill, under the same conditions, also authorizes would also require the board, on and after January 1, 2018, and before January 1, 2023, to credit and set off overpayment of taxes barred by the statute of limitations in one quarter against an underpayment of taxes in another quarter within the same calendar year, if both the set off setoff and overpayment occurred during the same period put at issue by the taxpayer’s claim for refund. On or before January 1, 2021, the bill would require the board to submit a specified report to the Legislature relating to these requirements.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   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, 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.
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 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.
(b) (1) Notwithstanding any other law, on and after January 1, 2018, and before January 1, 2023, the board may shall credit and set off underpayment of taxes barred by the statute of limitations in one quarter against an overpayment of taxes in another quarter within the same calendar year, so long as both the set off setoff and overpayment occurred during the same calendar year put at issue by the taxpayer’s claim to refund. In the alternative, on and after January 1, 2018, and before January 1, 2023, the board may shall also credit and set off overpayment of taxes barred by the statute of limitations in one quarter against an underpayment of taxes in another quarter within the same calendar year, so long as both the set off setoff and overpayment occurred during the same calendar year put at issue by the taxpayer’s claim for refund. If a taxpayer can establish both the transaction in which there was an overpayment and the corresponding offset adjustment, then those provisions within this article relating to refund and the statute of limitations do not apply.
(2) Paragraph (1) shall apply only if a claim for refund for the quarter in which there is an underpayment or overpayment of tax is not barred by the statute of limitations on January 1, 2018.
(3) (A) On or before January 1, 2021, the board shall submit a report to the Legislature that includes all of the following:
(i) The number of taxpayers in each calendar year receiving the benefit of a credit for an overpayment of taxes barred by the statute of limitations pursuant to this subdivision, along with the aggregate value of all such credits.
(ii) The number of taxpayers in each calendar year where an underpayment of taxes barred by the statute of limitations was credited and set off by an overpayment pursuant to this subdivision, along with the aggregate value of all such underpayments.
(iii) The net fiscal impact in each fiscal year to the General Fund of the credit and offset provisions provided by this subdivision.
(B) (i) A report to the Legislature pursuant to this paragraph shall be submitted in compliance with Section 9795 of the Government Code.
(ii) This paragraph shall become inoperative on January 1, 2025 pursuant to Section 10231.5 of the Government Code.