Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61045]

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

PART 7. INSURANCE TAXATION [12001 - 13170]

  ( Part 7 added by Stats. 1941, Ch. 113. )

CHAPTER 5. Payment and Collection [12601 - 12691]

  ( Chapter 5 added by Stats. 1941, Ch. 113. )

ARTICLE 2. Interest and Penalties [12631 - 12637]
  ( Article 2 added by Stats. 1961, Ch. 740. )

12631.
  

(a) Any insurer that fails to pay any tax, except a tax determined as a deficiency assessment by the board under Article 3 (commencing with Section 12421) of Chapter 4, within the time required, shall pay a penalty of 10 percent of the amount of the tax in addition to the tax, plus interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the due date of the tax until the date of payment.

(b) This section shall become operative on July 1, 2013.

(Repealed (in Sec. 96) and added by Stats. 2013, Ch. 33, Sec. 97. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.)

12631.5.
  

(a) If the board finds, taking into account all facts and circumstances, that it is inequitable to compute interest at the modified adjusted rate per month or fraction thereof, as defined in subdivision (b) of Section 6591.5, interest shall be computed at the modified adjusted daily rate from the date on which the tax or prepayment was due until the date of payment, if all of the following occur:

(1) The payment of tax or prepayment was made one business day after the date the tax or prepayment was due.

(2) The person was granted relief from all penalties that applied to that payment of tax or prepayment.

(3) The person files a request for an oral hearing before the board.

(b) For purposes of this section, “modified adjusted daily rate” means the modified adjusted rate per annum as defined in subdivision (a) of Section 6591.5 determined on a daily basis by dividing the modified adjusted rate per annum by 365.

(c) For purposes of this section, “board” means the members of the State Board of Equalization meeting as a public body.

(d) For purposes of this section, “business day” means any day other than a Saturday, Sunday, or any day designated as a state holiday.

(e) This section shall not apply to any payment made pursuant to a deficiency determination, or a determination where no return has been filed.

(f) This section shall only apply to electronic payments or prepayments of taxes.

(Repealed and added by Stats. 2016, Ch. 264, Sec. 8. (AB 2201) Effective January 1, 2017.)

12632.
  

(a) An insurer that fails to pay any deficiency assessment when it becomes due and payable shall, in addition to the deficiency assessment, pay a penalty of 10 percent of the amount of the deficiency assessment, exclusive of interest and penalties. The amount of any deficiency assessment, exclusive of penalties, shall bear interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the amount, or any portion thereof, would have been payable if properly reported and assessed until the date of payment.

(b) This section shall become operative on July 1, 2013.

(Repealed (in Sec. 99) and added by Stats. 2013, Ch. 33, Sec. 100. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.)

12633.
  

When a deficiency assessment is made on the basis of a proposal submitted by the commissioner pursuant to Section 12423 a penalty of 10 percent of the amount of the deficiency assessment shall be added thereto.

(Added by Stats. 1961, Ch. 740.)

12634.
  

When a deficiency assessment is made on the basis of a proposal submitted by the commissioner pursuant to Section 12422 and any part of the deficiency is due to negligence or intentional disregard of this part or rules and regulation adopted to implement this part but without intent to defraud, a penalty of 10 percent of the amount of the deficiency assessment shall be added thereto.

(Added by Stats. 1961, Ch. 740.)

12635.
  

If any part of a deficiency for which a deficiency assessment is made is due to fraud, a penalty of 25 percent of the amount of the deficiency assessment in addition to any other penalties shall be added thereto.

(Added by Stats. 1961, Ch. 740.)

12636.
  

(a) If the board finds that an insurer’s failure to make a timely return or payment is due to reasonable cause and to circumstances beyond the insurer’s control, and which occurred despite the exercise of ordinary care and in the absence of willful neglect, the insurer may be relieved of the penalty provided by Section 12258, 12287, 12631, 12632, or 12633.

(b) Any insurer seeking to be relieved of the penalty shall file with the board a statement under penalty of perjury setting forth the facts upon which the claim for relief is based.

(Amended by Stats. 2017, Ch. 561, Sec. 231. (AB 1516) Effective January 1, 2018.)

12636.5.
  

(a) Every payment on an insurer’s or surplus line broker’s delinquent annual tax shall be applied as follows:

(1) First, to any interest due on the tax.

(2) Second, to any penalty imposed by this part.

(3) The balance, if any, to the tax itself.

(b) This section shall become operative on July 1, 2013.

(Repealed (in Sec. 105) and added by Stats. 2013, Ch. 33, Sec. 106. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.)

12637.
  

If the board finds that a person’s failure to make a timely return or payment was due to disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of interest provided for by Sections 12258, 12287, 12307, 12631, and 12632. Any person seeking to be relieved of interest 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.

(Added by Stats. 1989, 1st Ex. Sess., Ch. 14, Sec. 6. Effective November 7, 1989.)

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