Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011
 

Sales And Use Tax Law

CHAPTER 6. COLLECTION OF TAX

Article 2. Suit for Tax

Section 6711

6711. Court action. At any time within three years after any tax or any amount of tax required to be collected becomes due and payable and at any time within three years after the delinquency of any tax or any amount of tax required to be collected, or within the period during which a lien is in force as the result of the recording of an abstract under Section 6738 or the recording or filing of a notice of state tax lien under Section 7171 of the Government Code, the board may bring an action in the courts of this state, of any other state, or of the United States in the name of the people of the State of California to collect the amount delinquent together with penalties and interest.

History.—Stats. 1943, p. 2458, operative July 1, 1943, added provision permitting action within three years of recordation of abstract or certificate. Stats. 1969, p. 1821, in effect November 10, 1969, operative January 1, 1970, substituted "the period during which a lien is in force as the result of the" for "three years after the last", and added the reference to Section 6757.5. Stats. 1977, Ch. 481, operative July 1, 1978, substituted "the recording or filing of a notice of state tax lien under Section 6757," for "of a certificate under Section 6757 or 6757.5,". Stats. 1980, Ch. 600, operative January 1, 1981, substituted "Section 7171 of the Government Code" for "Section 6757".

When tax is "delinquent."—An action brought within three years of the service of notice of an additional assessment is timely, even though more than three years has elapsed since the fifteenth day following the close of the period for which the assessment is made. People v. Hochwender (1942) 20 Cal.2d 181; People v. West Publishing Co. (1950) 35 Cal.2d 80.

An action brought within three years from 30 days after mailing of notice of redermination is timely, since the determination did not become final until 30 days after service of the notice. People v. Nymer (1945) 71 Cal.App.2d 550.

Statute of limitations—alter ego.—The statute of limitations does not bar an action against the defendant where the defendant is the alter ego of a tax debtor corporation and a certificate of delinquency has been duly filed against the tax debtor corporation prior to the running of the statute of limitations. People v. Clauson, People v. Miller, People v. Johnson (1964) 231 Cal.App.2d 374.

Statute of limitations.—Where an action was filed more than three years after the recording of a certificate and before the recording of a new certificate under Section 6757, the action was barred by the statute of limitations. People v. Smejkal (1968) 266 Cal.App.2d 971.

Action on Surety Contract—Effect of Time Extension Before Cause of Action Barred.—An Action to enforce the liability of a surety for delinquent taxes of its principal was held timely under this section when brought three years and five months after the cause of action arose, i.e., the date the determination of tax became final, where the prior limitation period of three years was extended by the Legislature before the cause of action was barred under the prior period. People v. United States Fire Insurance Co. (1976) 61 Cal.App.3d 231.

Statue of Limitations.—The State can bring an in personam action within three years after the tax becomes due and payable, but no later. People v. Garg (1993) 16 Cal.App.4th 357.

Fraudulent transfer.—Agreement between spouses transmuting future earnings from community property to separate property was fraudulent transfer, in violation of Family Code section 851 and Civil Code section 3439.04(a), since the taxpayer had a present interest in the future earnings of his spouse and the purpose for the agreement was to avoid having the spouse's earnings be community property which could be used to pay the tax debt of the taxpayer. State Board of Equalization v. Woo (2000) 82 Cal.App.4th 481.