Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61050]

  ( Heading of Division 2 amended by Stats. 1968, Ch. 279. )

PART 1. SALES AND USE TAXES [6001 - 7176]

  ( Part 1 added by Stats. 1941, Ch. 36. )

CHAPTER 7. Overpayments and Refunds [6901 - 6981]

  ( Chapter 7 added by Stats. 1941, Ch. 36. )

ARTICLE 1. Claim for Refund [6901 - 6909]
  ( Article 1 added by Stats. 1941, Ch. 36. )

6901.
  

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:

(a) Any amount of tax, interest, or penalty was not required to be paid.

(b) 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) 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.

(Amended by Stats. 1994, Ch. 726, Sec. 23. Effective September 22, 1994.)

6901.5.
  

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 taxable or is in excess of the taxable amount and is actually paid by the customer to the person, the amount so paid shall be returned by the person to the customer upon notification by the Board of Equalization or by the customer that such excess has been ascertained. In the event of his or her failure or refusal to do so, the amount so paid, if knowingly or mistakenly computed by the person upon an amount that is not taxable or is in excess of the taxable amount, shall be remitted by that person to this state. Notwithstanding subdivision (b) of Section 6904, those amounts remitted to the state shall be credited by the board on any amounts due and payable under this part on the same transaction from the person by whom it was paid to this state and the balance, if any, shall constitute an obligation due from the person to this state.

(Amended by Stats. 1987, Ch. 38, Sec. 4.)

6902.
  

(a) (1) For persons required to file returns on other than an annual basis, except as provided in subdivision (b) no refund shall be approved by the board after three years from the last day of the month following the close of the quarterly period for which the overpayment was made, or, with respect to determinations made under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), or Article 4 (commencing with Section 6536) of Chapter 5 of this part, after six months from the date the determinations become final, or after six months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the board within that period.

(2) For persons required to file returns on an annual basis, except as provided in subdivision (b) no refund shall be approved by the board after three years from the last day of the calendar month following the one-year period for which the overpayment was made, or with respect to determinations made under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), or Article 4 (commencing with Section 6536) of Chapter 5, after six months from the date the determinations become final, or after six months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the board within that period. No credit shall be approved by the board after the expiration of that period unless a claim for credit is filed with the board within that period, or unless the credit relates to a period for which a waiver is given pursuant to Section 6488.

(b) A refund may be approved by the board for any period for which a waiver is given under Section 6488 if a claim therefor is filed with the board before the expiration of the period agreed upon.

(Amended by Stats. 1992, Ch. 902, Sec. 6. Effective September 25, 1992. Operative January 1, 1993, by Sec. 9 of Ch. 902.)

6902.1.
  

(a) Upon receipt of proof to its satisfaction that, in connection with the sale, through a dealer and not on the dealer’s own account, of a used mobilehome on which the registration was transferred during the period from January 1, 1977 to January 1, 1980, and on which use tax has been paid on items not part of a mobilehome as a vehicle as set forth in Sections 6012.2 and 6276.1, the State Board of Equalization shall refund such overpayment to the purchaser of the mobilehome.

(b) Notwithstanding the provisions of Section 6902, any purchaser entitled to a refund pursuant to subdivision (a) may file a claim for refund until December 31, 1982.

(Added by Stats. 1981, Ch. 781, Sec. 1.)

6902.2.
  

(a) (1) In lieu of claiming the credit allowed by Section 17053.49 or 23649, a person who has paid sales tax reimbursement to a retailer or use tax on a purchase or purchases of property for which a credit may be allowed pursuant to those sections, may file a claim for refund equal to the credit amount that would otherwise be allowed pursuant to those sections. Any claim so filed shall be submitted to the board on a form prescribed by the board, shall be filed no earlier than the date a claim could have been made for a tax credit or carryover of a credit under Section 17053.49 or 23649, whichever is applicable, and shall be for an amount not in excess of the amount of the credit that could have been used to reduce the “net tax,” as defined in Section 17039, or the “tax,” as defined in Section 23036. Any credit carried over pursuant to Section 17053.49 or Section 23649 may not be refunded under this section until the credit carried over could be applied to reduce the “net tax” (as defined in Section 17039) or the “tax” (as defined in Section 23036), as applicable. Under no circumstances may any claim for refund exceed the “net tax,” as defined by Section 17039, or the “tax,” as defined by Section 23036, after the allowance of any credits authorized by Section 17039 or 23036. A claim for refund shall, unless the sale or use of the property is otherwise exempt under this part, be accompanied by proof of payment of the tax to a retailer, including, but not limited to, a copy of an invoice or purchase contract that indicates the following:

(A) The date on which the purchase occurred.

(B) A description of the property purchased.

(C) The price paid for the property.

(D) The amount of tax paid with respect to the purchase.

(2) In the case of a person who has self-reported use tax to the board, the claim for refund shall also indicate the amount of use tax paid and the period for which that tax was remitted.

(3) Any person who claims a refund under this section shall make an irrevocable election to waive the equivalent amount of credit allowed under Section 17053.49 or 23649. Any refund claimed under this section shall be in lieu of claiming any credit under Section 17053.49 or 23649. Any person electing to file a claim for refund pursuant to this section shall provide a copy of the personal or corporation tax return on which the tax liability was assessed for which the in-lieu refund is being claimed under this section.

(b) No interest shall be paid on any refund made pursuant to this section.

(c) Notwithstanding Section 6961, the board may recover any refund or part thereof that is erroneously made pursuant to this section. In recovering any erroneous refund made pursuant to this section, the board, in its discretion, may issue a deficiency determination in accordance with Article 2 (commencing with Section 6481) or Article 4 (commencing with Section 6536) of Chapter 5. Except in the case of fraud, that determination shall be made within three years from the last day of the month following the quarterly period in which the board approved the refund.

(d) The board shall provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the board and the Franchise Tax Board, of the persons who during the year have claimed a refund of sales or use tax under this section and the amount of the refund issued to each person.

(e) Any refund approved by the board pursuant to this section shall be payable from the General Fund.

(Amended by Stats. 2003, Ch. 606, Sec. 1. Effective January 1, 2004.)

6902.3.
  

Notwithstanding Section 6902, a refund of an overpayment of any tax, penalty, or interest collected by the board by means of levy, through the use of liens, or by other enforcement procedures, shall be approved if a claim for refund is filed within three years of the date of overpayment.

(Amended by Stats. 2006, Ch. 538, Sec. 617. Effective January 1, 2007.)

6902.4.
  

(a) The limitation period specified in Section 6902 shall be suspended during any period of a person’s life that the person is financially disabled.

(b) (1) For purposes of subdivision (a), a person is financially disabled if the person is unable to manage his or her financial affairs by reason of medically determinable physical or mental impairment of the person that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. A person shall not be considered to have an impairment unless proof of the existence thereof is furnished in the form and manner as the board may require.

(2) A person shall not be treated as financially disabled during any period that the person’s spouse or any other person is authorized to act on behalf of the person in financial matters.

(c) This section applies to periods of disability commencing before, on, or after the effective date of the act adding this section, but does not apply to any claim for refund that, without regard to this section, is barred by operation or rule of law, including res judicata, as of the effective date of the act adding this section.

(Added by Stats. 1999, Ch. 929, Sec. 1.7. Effective January 1, 2000.)

6902.5.
  

(a) For the purposes of this section:

(1) “Qualified taxpayer” means a person who is a qualified taxpayer within the meaning of paragraph (17) of subdivision (b) of Section 17053.85, 17053.95, 23685, or 23695, or paragraph (19) of subdivision (b) of Section 17053.98 or 23698.

(2) “Affiliate” means a qualified taxpayer’s affiliated corporation that has been assigned any portion of the credit amount by the qualified taxpayer pursuant to subdivision (c) of Section 23685, subdivision (c) of Section 23695, or subdivision (c) of Section 23698.

(3) “Credit amount” means an amount equal to the tax credit amount that would otherwise be allowed to a qualified taxpayer pursuant to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698, but for the election made pursuant to this section.

(4) “Production period” means the production period as defined in paragraph (12) of subdivision (b) of Section 17053.85, 17053.95, 23685, or 23695 or in paragraph (14) of subdivision (b) of Section 17053.98 or 23698.

(5) (A) “Qualified sales and use taxes” means any state sales and use taxes imposed by Part 1 (commencing with Section 6001), on the operative date of the act adding this section.

(B) Notwithstanding subparagraph (A), “qualified sales and use taxes” does not mean taxes imposed by Section 6051.2, 6051.5, 6201.2, 6201.5, Part 1.5 (commencing with Section 7200), Part 1.6 (commencing with Section 7251), or Section 35 of Article XIII of the California Constitution.

(b) (1) A qualified taxpayer may, in lieu of claiming the credit allowed by Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698, make an irrevocable election to apply the credit amount against qualified sales and use taxes imposed on the qualified taxpayer in accordance with this section.

(2) An affiliate may, in lieu of claiming the assigned portion of the credit allowed by Section 23685, 23695, or 23698, make an irrevocable election to apply the assigned portion of the credit amount against qualified sales and use taxes imposed on the affiliate in accordance with this section.

(c) (1) A qualified taxpayer or affiliate shall submit to the California Department of Tax and Fee Administration an irrevocable election, in a form as prescribed by the California Department of Tax and Fee Administration, which shall include, but not be limited to, the following information:

(A) Representation that the claimant is a qualified taxpayer or an affiliate.

(B) Statement of the dates on which the production period began and ended.

(C) The credit amount, and if an affiliate, the portion of the credit amount assigned to it and documentation supporting the assignment of that portion of the credit amount.

(D) The amount of qualified sales and use taxes the claimant remitted to the California Department of Tax and Fee Administration during the period commencing on the first day of the calendar quarter commencing immediately before the beginning of the production period, and ending on the date the claimant was required to file its most recent sales and use tax return with the California Department of Tax and Fee Administration.

(E) A copy of the credit certificate issued pursuant to subparagraph (C) of paragraph (2) of subdivision (g) of Section 17053.85 or 23685 or subparagraph (D) of paragraph (3) of subdivision (g) of Section 17053.95, 17053.98, 23695, or 23698.

(2) The election shall be filed on or before the date on which the qualified taxpayer or affiliate would first be allowed to claim a credit pursuant to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698 on its tax return.

(3) (A) For those amounts for which an irrevocable election is made in lieu of tax credits allowed pursuant to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698 that would otherwise be allowed for any taxable year beginning on or after January 1, 2020, and before January 1, 2023, subdivision (d) and paragraph (1) of subdivision (e) shall only apply to those in-lieu credit amounts that do not exceed five million dollars ($5,000,000) for that taxable year.

(B) For those amounts for which an irrevocable election is made in lieu of tax credits allowed pursuant to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698 that would otherwise be allowed for any taxable year beginning on or after January 1, 2020, and before January 1, 2023, that are in excess of five million dollars ($5,000,000) for that taxable year, subdivision (f) shall apply.

(d) (1) The claimant may elect to obtain a refund of qualified sales and use taxes paid during the period described in subparagraph (D) of paragraph (1) of subdivision (c). If the claimant elects to obtain a refund of qualified sales and use taxes, the claimant shall file a claim for refund with the irrevocable election described in subdivision (c). The refund amount shall not exceed, for a qualified taxpayer, the credit amount, or for an affiliate, the portion of the credit amount assigned to it.

(2) No interest shall be paid on any amount refunded or credited pursuant to paragraph (1).

(e) (1) If the claimant does not elect to obtain a refund or in the case where the credit amount, or assigned portion, exceeds the amount of its claim for refund for the qualified sales and use taxes, the claimant may, for the reporting periods in the five years following the last reporting period as described in subparagraph (D) of paragraph (1) of subdivision (c), offset any remaining credit amount, or assigned portion, against the qualified sales and use taxes imposed during those reporting periods.

(2) Notwithstanding paragraph (1), the total amount of refunds or credit offsets claimed under subdivision (d) and paragraph (1) of this subdivision in lieu of tax credits allowed pursuant to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698 that would otherwise be allowed for a taxable year beginning on or after January 1, 2020, and before January 1, 2023, shall not exceed five million dollars ($5,000,000).

(f) Notwithstanding subdivision (d) and paragraph (1) of subdivision (e), for those amounts for which an irrevocable election is made in lieu of tax credits allowed pursuant to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698 that would otherwise be allowed for any taxable year beginning on or after January 1, 2020, and before January 1, 2023, that are in excess of five million dollars ($5,000,000) for that taxable year, the claimant may offset that excess credit amount, or assigned portion, against the qualified sales and use taxes imposed during the reporting periods in the five years following and including the reporting period beginning on and after January 1, 2024.

(g) Section 6961 shall apply to any refund, or part thereof, that is erroneously made and any credit, or part thereof, that is erroneously allowed pursuant to this section.

(h) The California Department of Tax and Fee Administration shall provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the California Department of Tax and Fee Administration and the Franchise Tax Board, of the qualified taxpayers, or affiliates that have been assigned a portion of the credit allowed under Section 23685 pursuant to subdivision (c) of Section 23685, Section 23695 pursuant to subdivision (c) of Section 23695, or Section 23698 pursuant to subdivision (c) of Section 23698, who, during the year, have made an irrevocable election pursuant to this section and the credit amount, or portion of the credit amount, claimed by each qualified taxpayer or affiliate.

(i) The California Department of Tax and Fee Administration may prescribe rules and regulations for the administration of this section.

(j) The amendments made to this section by the act adding this subdivision shall not apply to irrevocable elections made before the operative date of the act adding this subdivision.

(Amended by Stats. 2020, Ch. 8, Sec. 4. (AB 85) Effective June 29, 2020.)

6902.6.
  

(a) A claim for refund that is otherwise valid under Sections 6902 and 6904 that is made in the case in which the amount of tax determined has not been paid in full shall be deemed to be a timely filed claim for refund with respect to all subsequent payments applied to that determination.

(b) For purposes of this section, “amount of tax determined” means an amount of tax, interest, or penalty, with respect to a single determination made under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), or Article 4 (commencing with Section 6536) of Chapter 5.

(c) This section shall apply only to claims for refunds made on or after the effective date of the act adding this section.

(Added by Stats. 2016, Ch. 98, Sec. 1. (AB 1856) Effective January 1, 2017.)

6902.7.
  

(a) For purposes of this section:

(1) “Qualified small business employer” means a person that is a qualified small business employer within the meaning of paragraph (3) of subdivision (b) of Section 17053.72 or paragraph (3) of subdivision (b) of Section 23627.

(2) “Credit amount” means an amount equal to the credit amount that would otherwise be allowed to a qualified small business employer pursuant to Section 17053.72 or 23627, but for the irrevocable election made pursuant to Section 6902.8.

(3) “Qualified sales or use taxes” means any sales and use taxes imposed by Part 1 (commencing with Section 6001) and Section 35 of Article XIII of the California Constitution, local sales and use taxes imposed in accordance with the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)), and local transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)).

(b) The department shall allow a qualified small business employer that received a tentative credit reservation pursuant to Section 6902.8 and that made an irrevocable election pursuant to Section 6902.8 to apply the small business hiring credit amount against qualified sales and use taxes imposed on the qualified small business employer, as follows:

(1) For monthly filers, the credit shall apply to amounts due and payable for the month commencing on March 1, 2021, ending on March 31, 2021, and due April 30, 2021.

(2) For quarterly filers, the credit shall apply to amounts due and payable for the quarter commencing on January 1, 2021, ending on March 31, 2021, and due April 30, 2021.

(3) For annual filers, fiscal year filers, or a qualified small business owner on any other reporting basis, the credit shall apply to amounts due and payable on the first return due on or after April 30, 2021.

(c) Any excess credit shall be carried over and shall not be refunded, as follows:

(1) In the case where the credit amount exceeds the sales and use taxes due and payable as described in subdivision (b), the department shall apply the excess credit against amounts due and payable for periods following those described in subdivision (b) on returns due and filed on or before April 30, 2026.

(2) Any remaining excess credit amount after April 30, 2026, shall not be refunded and shall be forfeited.

(d) No interest shall be paid on any amount credited pursuant to subdivisions (b) or (c).

(e) Section 6961 shall apply to any credit, or part thereof, that is erroneously allowed pursuant to this section.

(f) Notwithstanding Section 7056, the department shall provide information to the Franchise Tax Board, in a form and manner agreed upon by the department and the Franchise Tax Board, regarding the qualified small business employers that have been assigned a credit allowed under Sections 17053.72 and 23627, and have made an irrevocable election pursuant to Section 6902.8, and the credit amount claimed by each qualified small business employer.

(g) The department may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer, and enforce its duties under this section. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption.

(h) The Small Business Hiring Credit Fund is hereby created in the State Treasury for the sole purpose of applying the small business hiring credits allowed by this section and Section 6902.9. Any unused money remaining in the fund shall be transferred to the General Fund by June 1, 2027.

(Amended by Stats. 2021, Ch. 82, Sec. 4. (AB 150) Effective July 16, 2021.)

6902.8.
  

(a) Unless the context otherwise requires, the definitions set forth in Sections 17053.72 and 23627 govern the construction of this section.

(b) A qualified small business employer shall submit an application to the department in a form and manner prescribed by the department for a tentative credit reservation amount for the small business hiring tax credit allowed to a qualified small business employer pursuant to Section 17053.72 or 23627, or both.

(c) The application shall include the following:

(1) The net increase in qualified employees, as determined in subdivision (c) of Section 17053.72 or subdivision (c) of Section 23627.

(2) (A) Whether the credit will be applied under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both.

(B) Whether the qualified small business employer makes an irrevocable election to apply the credit against qualified sales and use taxes pursuant to Section 6902.7 in lieu of claiming the credit allowed by Section 17053.72 or 23627. The election shall not be amended.

(3) Any other information as deemed necessary by the department.

(d) (1) Qualified small business employers shall submit, and the department shall accept, applications for tentative credit reservation amounts during the period beginning December 1, 2020, and ending January 15, 2021, or any earlier date determined by the department when the maximum cumulative total allocation limit in subdivision (e) is reached.

(2) Applications shall not be accepted by the department after January 15, 2021, or any other date determined by the department.

(3) The date and time an application is received shall be determined by the department. The determination of the department with respect to the date and time an application is received may not be reviewed in any administrative or judicial proceeding.

(e) (1) The aggregate amount of credit that may be allocated pursuant to Sections 6902.7, 17053.72, and 23627 shall not exceed the cumulative total of one hundred million dollars ($100,000,000).

(2) The department shall allocate a tentative credit reservation to qualified small business employers on a first-come, first-served basis. For each application received, the total amount of credit available for allocation shall be reduced by an amount equal to the allocated tentative credit reservation amount.

(3) The tentative credit reservation amount shall be equal to the net increase in qualified employees as reported on the application multiplied by one thousand dollars ($1,000) and shall not exceed one hundred thousand dollars ($100,000) per qualified small business employer.

(4) The department shall promptly, no more than 30 days after the application is received, notify the applicant of the tentative credit reservation amount. The amount allocated shall not constitute a determination by the department with respect to any of the requirements of this section or eligibility for the credit authorized by Section 6902.7, 17053.72, or 23627.

(5) The department shall periodically provide on its website the aggregate allocated tentative credit reservation amount under Sections 6902.7, 17053.72, and 23627, and remaining credit amount available for allocation.

(f) Notwithstanding Section 7056, the department shall provide the Franchise Tax Board, in the form and manner agreed upon by the department and the Franchise Tax Board, any and all information provided by each applicant pursuant to subdivision (c) and any other information deemed necessary by the department and the Franchise Tax Board to administer and enforce this section, and Sections 17053.72 and 23267.

(g) The department may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer, and enforce its duties under this section. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption.

(Added by Stats. 2020, Ch. 41, Sec. 2. (SB 1447) Effective September 9, 2020.)

6902.9.
  

(a) For purposes of this section:

(1) “Converted entity” means a qualified small business employer that changed its business form to a different entity type and continues its operation.

(2) “Credit amount” means an amount equal to the credit amount that would otherwise be allowed to a qualified small business employer pursuant to Section 17053.71 or 23628 but for the irrevocable election made pursuant to Section 6902.10.

(3) “Qualified sales or use taxes” means sales and use taxes imposed by Part 1 (commencing with Section 6001) and Section 35 of Article XIII of the California Constitution, local sales and use taxes imposed in accordance with the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)), and local transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)).

(4) “Qualified small business employer” has the same meaning as defined in Section 17053.71 or 23628.

(b) The department shall allow a qualified small business employer that received a tentative credit reservation pursuant to Section 6902.10 and that made an irrevocable election pursuant to Section 6902.10 to apply the small business hiring credit amount against qualified sales and use taxes imposed on the qualified small business employer as follows:

(1) For monthly filers, the credit shall apply to amounts due and payable for the month commencing on March 1, 2022, ending on March 31, 2022, and due on April 30, 2022.

(2) For quarterly filers, the credit shall apply to amounts due and payable for the quarter commencing on January 1, 2022, ending on March 31, 2022, and due on April 30, 2022, including prepayments for the quarter required pursuant to Article 1.1 (commencing with Section 6470) of Chapter 5.

(3) For annual filers, fiscal year filers, or a qualified small business employer or converted entity on any other reporting basis, the credit shall apply to amounts due and payable on the first return due on or after April 30, 2022.

(c) Any excess credit shall be carried over and shall not be refunded as follows:

(1) If the credit amount exceeds the sales and use taxes due and payable, as described in subdivision (b), the department shall apply the excess credit against amounts due and payable for periods following those described in subdivision (b) on returns due and filed on or before April 30, 2027, including prepayments required pursuant to Article 1.1 (commencing with Section 6470) of Chapter 5.

(2) Any remaining excess credit amount after April 30, 2027, shall not be refunded and shall be forfeited.

(d) A qualified small business employer that becomes a converted entity subsequent to making the election to apply the credit against qualified sales and use taxes pursuant to Section 6902.10 may transfer any small business hiring credit and excess credit amounts to the converted entity and apply those amounts against the qualified sales and use taxes of the converted entity as specified in subdivisions (b) and (c).

(e) Interest shall not be paid on an amount credited pursuant to subdivision (b), (c), or (d).

(f) Section 6961 shall apply to a credit, or part thereof, that is erroneously allowed pursuant to this section.

(g) Notwithstanding Section 7056, the department shall provide information to the Franchise Tax Board, in a form and manner agreed upon by the department and the Franchise Tax Board, regarding both of the following:

(1) The qualified small business employers and converted entities that have been assigned a credit allowed under Sections 17053.71 and 23628 and have made an irrevocable election pursuant to Section 6902.10.

(2) The credit amount claimed by each qualified small business employer and converted entity.

(h) (1) Notwithstanding Section 13018 of the Unemployment Insurance Code, the Employment Development Department shall, upon request, provide the department in the form and manner agreed upon by the department and the Employment Development Department, any and all information deemed necessary by the department to administer and enforce this section and Section 6902.10.

(2) The department may share information provided pursuant to this subdivision with the Franchise Tax Board, upon request, as necessary to administer and enforce Sections 17053.71 and 23628.

(i) The department may prescribe, adopt, and enforce emergency regulations as necessary to implement, administer, and enforce its duties under this section. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption.

(Added by Stats. 2021, Ch. 82, Sec. 5. (AB 150) Effective July 16, 2021.)

6902.10.
  

(a) Unless the context otherwise requires, the definitions set forth in Sections 17053.71 and 23628 govern the construction of this section.

(b) A qualified small business employer shall submit an application to the department in a form and manner prescribed by the department for a tentative credit reservation amount for the small business hiring tax credit allowed to a qualified small business employer pursuant to Section 17053.71 or 23628, or both.

(c) The application shall include all of the following:

(1) The net increase in qualified employees, as determined pursuant to subdivision (c) of Section 17053.71 or subdivision (c) of Section 23628.

(2) (A) If the credit will be applied under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both.

(B) If the qualified small business employer makes an irrevocable election to apply the credit against qualified sales and use taxes pursuant to Section 6902.9 in lieu of claiming the credit allowed by Section 17053.71 or 23628. An election under this subparagraph shall be allowed only for a qualified small business employer with an active seller’s permit or active certificate of registration-use tax. The election shall not be amended by the qualified small business employer or converted entity.

(3) If the applicant makes the election to apply the credit against qualified sales and use taxes as described in subparagraph (B) of paragraph 2, the qualified small business employer’s active seller’s permit number or active certificate of registration-use tax number.

(4) Valid state employer identification number of the qualified small business employer.

(5) Any other information and documentation as deemed necessary by the department.

(d) (1) Qualified small business employers shall submit, and the department shall accept, applications for tentative credit reservation amounts during the period beginning November 1, 2021, and ending November 30, 2021, or an earlier date determined by the department when the maximum cumulative total allocation limit in subdivision (e) is reached.

(2) Applications shall not be accepted by the department after November 30, 2021, or any other date determined by the department.

(3) The date and time an application is received shall be determined by the department. The determination of the department with respect to the date and time an application is received shall not be reviewed in any administrative or judicial proceeding.

(e) (1) The aggregate amount of credit that may be allocated pursuant to Sections 6902.9, 17053.71, and 23628 shall not exceed the cumulative total of seventy million dollars ($70,000,000) plus any amount of credit not allocated, and not required to be allocated, pursuant to subdivision (e) of Section 6902.8.

(2) The department shall allocate a tentative credit reservation to qualified small business employers on a first-come-first-served basis. For each application received, the total amount of credit available for allocation shall be reduced by an amount equal to the allocated tentative credit reservation amount.

(3) The tentative credit reservation amount per qualified small business employer shall be equal to the amount calculated pursuant to subparagraph (A) minus the amount calculated pursuant to subparagraph (B).

(A) The amount, not exceeding one hundred fifty thousand dollars ($150,000), that is equal to the net increase in qualified employees, as reported on the application, multiplied by one thousand dollars ($1,000).

(B) If the qualified small business employer received a tentative credit reservation amount pursuant to Section 6902.8, either of the following:

(i) For a qualified small business employer that made an irrevocable election pursuant to Section 6902.8 to apply the credit against qualified sales and use taxes pursuant to Section 6902.7, the credit amounts allocated to the qualified small business employer pursuant to Sections 6902.7 and 6902.8.

(ii) For a qualified small business employer that elected to apply the credit under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both, the tentative credit reservation amount received by the qualified small business employer pursuant to Section 6902.8.

(4) The department shall, within 30 days of receiving the application, notify the applicant of the tentative credit reservation amount. The amount allocated shall not constitute a determination by the department with respect to any of the requirements of this section or eligibility for the credit authorized by Section 6902.9, 17053.71, or 23628.

(5) The department shall periodically provide on its website the aggregate allocated tentative credit reservation amount under Sections 6902.9, 17053.71, and 23628 and the remaining credit amount available for allocation.

(6) The department may revise, on or before March 30, 2022, a qualified small business employer’s election to apply a credit against qualified sales and use taxes and instead apply the credit to taxes administered pursuant to Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both, if the qualified small business employer’s seller’s permit or certificate of registration-use tax has been suspended, revoked, canceled, or closed.

(7) (A) The department shall cancel or reduce a qualified small business employer’s tentative credit reservation amount if the qualified small business employer fails to provide application information or documentation required by subdivision (c) to the department within 15 calendar days after the department requests the information.

(B) Notwithstanding subparagraph (A), the department may reduce a qualified small business employer’s tentative credit reservation amount for clerical errors or upon request by the applicant.

(8) (A) Tentative credit reservation amounts that become available on and after December 1, 2021, and before April 1, 2022, shall be made available to qualified small business employers and converted entities that applied for a tentative credit reservation amount pursuant to subdivision (a) but did not receive a tentative credit reservation amount because the aggregate amount of tentative credit reservations applied for pursuant to Sections 6902.9, 17053.71, and 23628 exceeded the cumulative total described in paragraph (1).

(B) Tentative credit reservation amounts made available pursuant to subparagraph (A) shall be made available to qualified small business employers and converted entities on a first-come-first-served basis based on the order in which the application was received.

(f) Notwithstanding Section 7056, the department shall provide the Franchise Tax Board, in the form and manner agreed upon by the department and the Franchise Tax Board, any and all information provided by each applicant pursuant to subdivision (c) and any other information deemed necessary by the department and the Franchise Tax Board to administer and enforce this section and Sections 17053.71 and 23268.

(g) The department may prescribe, adopt, and enforce emergency regulations as necessary to implement, administer, and enforce its duties under this section. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption.

(Added by Stats. 2021, Ch. 82, Sec. 6. (AB 150) Effective July 16, 2021.)

6903.
  

(a) No credit or refund of any amount paid pursuant to Chapter 3 (commencing with Section 6201) shall be allowed to any person on the ground that the storage, use, or other consumption of the property is exempted under Section 6401 unless the person establishes to the satisfaction of the board that his or her vendor has paid the sales tax to the state with respect to the sale of the property.

(b) For purposes of this section, “amount paid pursuant to Chapter 3 (commencing with Section 6201)” does not include any payment or payments made pursuant to a determination made by the board under Articles 2 (commencing with Section 6481) and 3 (commencing with Section 6511) of Chapter 5.

(Amended by Stats. 1989, Ch. 768, Sec. 5.)

6904.
  

(a) Every claim shall be in writing and shall state the specific grounds upon which the claim is founded.

(b) A claim filed for or on behalf of a class of taxpayers shall do all of the following:

(1) Be accompanied by written authorization from each taxpayer sought to be included in the class.

(2) Be signed by each taxpayer or taxpayer’s authorized representative.

(3) State the specific grounds on which the claim is founded.

(Amended by Stats. 1987, Ch. 38, Sec. 5.)

6905.
  

Failure to file a claim within the time prescribed in this article constitutes a waiver of any demand against the State on account of overpayment.

(Added by Stats. 1941, Ch. 36.)

6906.
  

Within 30 days after disallowing any claim in whole or in part the board shall serve notice of its action on the claimant in the manner prescribed for service of notice of a deficiency determination.

(Added by Stats. 1941, Ch. 36.)

6907.
  

Interest shall be paid upon any overpayment of any amount of tax at the modified adjusted rate per month established pursuant to Section 6591.5, from the first day of the calendar month following the month during which the overpayment was made. In addition, a refund or credit shall be made of any interest imposed upon the person making the overpayment with respect to the amount being refunded or credited.

The interest shall be paid:

(a) In the case of a refund, to the last day of the calendar month following the date upon which the person making the overpayment, if he or she has not already filed a claim, is notified by the board that a claim may be filed or the date upon which the claim is approved by the board, whichever date is the earlier.

(b) In the case of a credit, to the same date as that to which interest is computed on the tax or amount against which the credit is applied.

(Amended by Stats. 1991, Ch. 236, Sec. 7.4. Effective July 29, 1991.)

6908.
  

(a) If the board determines that any overpayment has been made intentionally or by reason of carelessness, it shall not allow any interest thereon.

(b) If any person who has filed a claim for refund requests the board to defer action on the claim, the board, as a condition to deferring action, may require the claimant to waive interest for the period during which the person requests the board to defer action on the claim.

(Amended by Stats. 1968, Ch. 540.)

6909.
  

(a) The Controller shall transfer the amount of six hundred sixty-five million two hundred sixty-one thousand dollars ($665,261,000) from the General Fund to the Smog Impact Fee Refund Account, which is hereby created in the Special Deposit Fund.

(b) Notwithstanding Section 13340 of the Government Code, the moneys in the Smog Impact Fee Refund Account in the Special Deposit Fund are hereby continuously appropriated, without regard to fiscal years, to the Department of Motor Vehicles for the purpose of making refunds to persons who paid the smog impact fee formerly required by Chapter 3.3 (commencing with Section 6261) upon registering a vehicle in California. Each refund shall also include the amount of any penalties incurred by the payer with respect to the fee, and shall also include interest as specified in Sections 1673.2 and 1673.4 of the Vehicle Code. In addition, the appropriate level of court costs, fees, and expenses in the settlement of the case of Jordan v. Department of Motor Vehicles (1999) 75 Cal.App.4th 449, shall be determined through binding arbitration, and all of those fees, costs, or expenses shall be paid with funds from the account.

(c) The amount of any refund made under Section 1673.2 or Section 1673.4 of the Vehicle Code that is returned to the Department of Motor Vehicles because the recipient’s mailing address as shown by the records of the department is incorrect shall be retained in the Smog Impact Fee Refund Account in the Special Deposit Fund until either of the following occurs:

(1) The department is able to ascertain the correct address of the recipient, at which time the refund shall be mailed to that address.

(2) The date upon which those funds are transferred from the Smog Impact Fee Refund Account in the Special Deposit Fund back to the General Fund.

(d) Any unencumbered balance remaining in the account on or after June 30, 2004, shall revert to the General Fund.

(e) The Legislature hereby finds and declares that the amount appropriated under subdivision (b) is a refund of taxes, as described in subdivision (a) of Section 8 of Article XIII of the Constitution, and, as a result, is not included within the “appropriations subject to limitation” of the state, as defined in that subdivision (a).

(Added by Stats. 2000, Ch. 32, Sec. 5. Effective June 8, 2000.)

RTCRevenue and Taxation Code - RTC1.