Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2010
 

Sales And Use Tax Law

CHAPTER 6. COLLECTION OF TAX

Article 8. Miscellaneous Provisions

Section 6829

6829. Personal liability of corporate officer. (a) Upon the termination, dissolution, or abandonment of the business of a corporation, partnership, limited partnership, limited liability partnership or limited liability company, any officer, member, manager, partner, or other person having control or supervision of, or who is charged with the responsibility for the filing of returns or the payment of tax, or who is under a duty to act for the corporation, partnership, limited partnership, limited liability partnership, or limited liability company in complying with any requirement of this part, shall, notwithstanding any provision in the Corporations Code to the contrary, be personally liable for any unpaid taxes and interest and penalties on those taxes, if the officer, member, manager, partner, or other person willfully fails to pay or to cause to be paid any taxes due from the corporation, partnership, limited partnership, limited liability partnership, or limited liability company pursuant to this part.

(b) The officer, member, manager, partner, or other person shall be liable only for taxes that became due during the period he or she had the control, supervision, responsibility, or duty to act for the corporation, partnership, limited partnership, limited liability partnership, or limited liability company described in subdivision (a), plus interest and penalties on those taxes.

(c) Personal liability may be imposed pursuant to this section, only if the board can establish that the corporation, partnership, limited partnership, limited liability partnership, or limited liability company had included tax reimbursement in the selling price of, or added tax reimbursement to the selling price of, tangible personal property sold in the conduct of its business, or when it can be established that the corporation, partnership, limited partnership, limited liability partnership, or limited liability company consumed tangible personal property and failed to pay the tax to the seller or has included use tax on the billing and collected the use tax or has issued a receipt for the use tax and failed to report and pay use tax.

(d) For purposes of this section "willfully fails to pay or to cause to be paid" means that the failure was the result of an intentional, conscious, and voluntary course of action.

(e) Except as provided in subdivision (f), the sum due for the liability under this section may be collected by determination and collection in the manner provided in Chapter 5 (commencing with Section 6451) and Chapter 6 (commencing with Section 6701).

(f) A notice of deficiency determination under this section shall be mailed within three years after the last day of the calendar month following the quarterly period in which the board obtains actual knowledge, through its audit or compliance activities, or by written communication by the business or its representative, of the termination, dissolution, or abandonment of the business of the corporation, partnership, limited partnership, limited liability partnership, or limited liability company, or, within eight years after the last day of the calendar month following the quarterly period in which the corporation, partnership, limited partnership, limited liability partnership, or limited liability company business was terminated, dissolved, or abandoned, whichever period expires earlier. If a business or its representative files a notice of termination, dissolution, or abandonment of its business with a state or local agency other than the board, this filing shall not constitute actual knowledge by the board under this section.

History.—Added by Stats. 1981, Ch. 337, in effect January 1, 1982. Stats. 1987, Ch. 38, in effect January 1, 1988, in paragraph (a) changed "if such officer" to "if the officer", in paragraph (c), added the phrase "has issued a receipt for the use tax and failed". Stats. 1994, Ch. 1200, in effect September 30, 1994, added "Notwithstanding . . . Code," after "(a), substituted "upon" for "Upon", and added "domestic or foreign" after "abandonment of a" in subdivision (a); added "or limited liability company" and ", member, manager," throughout text of section; substituted "that" for "which" after "taxes" in subdivision (b); substituted "in" for "to" after "reimbursement" and added "or added . . . price of," after "price of," in subdivision (c). Stats. 1995, Ch. 679, in effect January 1, 1996, added "registered or foreign limited liability partnership or a" after "abandonment of a", in subdivision (a); added "partner," after "manager," in subdivision (a) and (b); added ", limited liability partnership" after "corporation" twice in subdivisions (a) and (c) and once in subdivision (b); and added "included use tax . . . tax or has" after "seller or has" in subdivision (c). Stats. 1996, Ch. 1003, in effect January 1, 1997, added "16306, 16307," after "Section" and added "a partnership," after "abandonment of" in subdivision (a); added "partnership" after "corporation" throughout text. Stats. 2008, Ch. 24 (AB 1895), in effect January 1, 2009, deleted "Notwithstanding Section 16306, 16307, 17101, 17158, 17355, 17450, or 17456 of the Corporations Code, upon" after "(a)", added "Upon the" before "termination", added "the business of" after "abandonment of a", added "corporation," before "partnership,", deleted "a registered or foreign" and added "limited partnership," after "partnership,", deleted "or a domestic or foreign corporate" after "limited liability partnership,", deleted "business" after "limited liability company,", added "limited partnership," after "partnership,", added "notwithstanding any provision in the Corporations Code to the contrary," after "part, shall," added "partner" after "manager,", and added "limited partnership," after "partnership," in subdivision (a); added "limited partnership," in subdivision (b); added "limited partnership," after "partnership," twice in subdivision (c); substituted "Except as provided in subdivision (f), the" for "The" in subdivision (e); and added subdivision (f).

Corporate officer liability.—Former corporate officer who had willingly failed to pay the subject sales taxes was liable for the corporation's debt for such taxes even though he was no longer an officer of the corporation at the time it dissolved. State Board of Equalization v. Wirick (2001) 93 Cal.App.4th_______.