Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011
 

Use Fuel Tax Law

CHAPTER 4. DETERMINATIONS.



CHAPTER 4. DETERMINATIONS.

Article 1. Returns and Payments

8751. Due date of tax. The excise tax imposed by this part is due and payable quarterly on or before the last day of the calendar month next succeeding each quarterly period in which a taxable use of fuel occurs.

History.—Stats. 1953, p. 3653, in effect September 9, 1953, substituted "twenty-fifth" for "fifteenth" day. Stats. 1967, p. 1380, operative December 1, 1967, substituted "last" for "twenty-fifth" day. Stats. 1983, Ch. 323, in effect July 21, 1983, operative August 1, 1983, substituted "15th" for "last" before "day". Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "15th" before "day." Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "quarterly on or . . . each quarterly period" for "monthly on or before the 25th day of the month following each calendar month" after "due and payable".

8751.5. Credit for tax paid to vendor. If any user has paid the tax to a vendor who is the holder of a valid vendor's permit issued under this part, he shall be allowed a credit against the amount of tax due under Section 8751 with respect to that fuel on which the tax was paid to the vendor.

History.—Added by Stats. 1957, p. 3228, in effect September 11, 1957, operative October 1, 1957.

8752. Filing monthly returns. (a) Except as provided in subdivision (b), on or before the last day of the calendar month following each quarterly period every user shall, except as otherwise provided in Section 8608, file with the board a return in the form as prescribed by the board, which may include, but not be limited to, electronic media showing the amount of any tax due and any other information as the board may require to carry out the purposes of this part. Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the board.

(b) This section shall not be applicable to any user whose sole use of fuel subject to the tax imposed by this part is for the propulsion of a privately operated passenger automobile, provided that the fuel used in this state, except fuel brought into this state in the fuel tank of the vehicle, is purchased from and delivered into the fuel tank of the vehicle by a vendor holding a permit issued under this part.

History.—Stats. 1953, p. 3654, in effect September 9, 1953, substituted "twenty-fifth" for "fifteenth" day. Stats. 1961, p. 1522, in effect September 15, 1961, added the exclusion relating to a user of fuel for the propulsion of a privately operated passenger vehicle. Stats. 1963, p. 1436, in effect September 20, 1963, amended this section by substituting "return" for "report," and adding "the amount of any tax due." Stats. 1967, p. 1380, operative December 1, 1967, substituted "last" for "25th" day. Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "last" before "day." Stats. 1984, Ch. 1707, effective January 1, 1985, added "except as . . . Section 8608" after "user shall." Stats. 1992, Ch. 889, in effect January 1, 1993, added "(a) Except as provided in subdivision (b)," before "on or before", deleted "fuel used during the preceding calendar month by the user in this state, the amount of", after "showing the amount of", deleted comma after "tax due" after "amount of any", substituted "any" for "such" after "tax due and", substituted a period for ", except that the provisions of" after "of this part" in subdivision (a) and added subdivision letter "(b)". Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "on or before . . . each quarterly period" for "or before the 25th day of each month" after "in subdivision (b)," in subdivision (a). Stats. 2002, Ch. 459 (AB 1936), in effect January 1, 2003, substituted "with" for "on forms prescribed by" after "Section 8608, file" in, and added "in the form . . . electronic media" to, the first sentence of, and added the second sentence to, subdivision (a).

8753. Remittances. The user shall accompany each return with a remittance payable to the board for the amount of tax due.

History.—Stats. 1963, p. 1436, in effect September 20, 1963, amended this section by substituting "return" for "report."

8754. Extension of time for filing. The board for good cause may extend for not to exceed one month the time for making any return or paying any tax required under this part. The extension may be granted at any time; provided, a request therefor is filed with the board within or prior to the period for which the extension may be granted.

Any user to whom an extension is granted shall pay, in addition to the tax, interest at the modified adjusted annual rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax would have been due without the extension to the date of payment.

History.—Stats. 1945, p. 1438, in effect September 15, 1945, added second sentence to first paragraph and substituted interest rate of one-half of 1 percent per month, or fraction thereof, for 6 percent per annum. Stats. 1953, p. 3598, in effect September 9, 1953, substituted "30" for "15" days in first sentence and added punctuation in second sentence. Stats. 1963, p. 1436, in effect September 20, 1963, substituted "one month" for "30 days," and substituted "return" for "report." Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted . . . 19269" for "rate . . . thereof" before "from" in the second paragraph. Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified . . . thereof" for "adjusted annual rate" before "established," substituted "Section 6591.5" for "Section 19269."

8755. Return periods. The board, if it deems it necessary in order to ensure payment of the tax imposed by this part, or to facilitate the administation of this part, may require returns and payment of the tax to be made for designated periods other than quarterly periods. On or before the last day of the calendar month following each designated period, a return for the preceding designated period shall be filed with the board in any form as the board may prescribe.

History.—Added by Stats. 1957, p. 2490, in effect September 11, 1957. Stats. 1963, p. 1436, in effect September 20, 1963, substituted "returns" for "reports". Stats. 1986, Ch. 308, effective January 1, 1987, specified that returns are to be filed on or before the 25th day following the last day of each designated period. Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "quarterly" for "monthly" after "periods other than" in the first sentence; and substituted "last day of the calendar month following" for "25th day following the last day of" after "or before the" and substituted "any" for "such" after "the board in" in the second sentence.

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Article 1.1. Prepayments [Repealed.]

  • § 8756. Application of article. [Repealed.]
  • § 8756.1. Prepayment. [Repealed.]
  • § 8756.2. Prepayment form; when due. [Repealed.]
  • § 8756.3. Credit for prepayment. [Repealed.]
  • § 8756.4. Determination of estimated measure of tax liability. [Repealed.]
  • § 8756.5. Penalty for late prepayment. [Repealed.]
  • § 8756.6. Penalty for failure to make a timely prepayment but return and payment timely. [Repealed.]
  • § 8756.7. Penalty in case of negligence or intentional disregard. [Repealed.]
  • § 8756.8. Notification. [Repealed.]

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Article 1.1. Payment by Electronic Funds Transfer1

1 Article 1.1 was added by Stats. 2000, Ch. 923 (AB 2894), effective January 1, 2001.

8760. Electronic funds transfer payments. (a) Any person whose estimated tax liability under this part averages twenty thousand dollars ($20,000) or more per month, as determined by the board pursuant to methods of calculation prescribed by the board, shall remit amounts due by an electronic funds transfer under procedures prescribed by the board.

(b) Any person whose estimated tax liability under this part averages less than twenty thousand dollars ($20,000) per month may elect to remit amounts due by electronic funds transfer with the approval of the board.

(c) Any person remitting amounts due pursuant to subdivision (a) or (b) shall perform electronic funds transfer in compliance with the due dates set forth in Article 1 (commencing with Section 8751). Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state's demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state's demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs.

(d) Any person remitting taxes by electronic funds transfer shall, on or before the due date of the remittance, file a return for the preceding reporting period in the form and manner prescribed by the board. Any person who fails to timely file the required return shall pay a penalty of 10 percent of the amount of taxes with respect to the period for which the return is required.

(e) Any person required to remit taxes pursuant to this article who remits those taxes by means other than appropriate electronic funds transfer shall pay a penalty of 10 percent of the taxes incorrectly remitted.

(f) Any person who fails to pay any tax to the state or any amount of tax required to be collected and paid to the state, except amounts of determinations made by the board under Article 2 (commencing with Section 8776) or Article 3 (commencing with Section 8801), within the time required shall pay a penalty of 10 percent of the tax or amount of tax, in addition to the tax or amount of tax, plus interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax became due and payable to the state until the date of payment.

(g) In determining whether a person's estimated tax liability averages twenty thousand dollars ($20,000) or more per month, the board may consider tax returns filed pursuant to this part and any other information in the board's possession.

(h) The penalties imposed by subdivisions (d), (e), and (f) shall be limited to a maximum of 10 percent of the taxes due for any one return. Any person remitting taxes by electronic funds transfer shall be subject to the penalties under this section and not Section 8876.

(i) The board shall promulgate regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code for purposes of implementing this section.

History.—Stats. 2005, Ch. 519 (AB 1765), in effect October 4, 2005, but operative January 1, 2006, deleted the former last sentence of subdivision (b) which provided "The election shall be operative for a minimum of one year."

8761. Relief of penalty. If the board finds that a person's failure to make payment by an appropriate electronic funds transfer in accordance with board procedures is due to reasonable cause and circumstances beyond the person's control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, that person shall be relieved of the penalty provided in subdivision (e) of Section 8760. Any person seeking to be relieved of the penalty 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.

8762. Definitions. (a) "Electronic funds transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape, so as to order, instruct, or authorize a financial institution to debit or credit an account. Electronic funds transfers shall be accomplished by an automated clearinghouse debit, an automated clearinghouse credit, or by Federal Reserve Wire Transfer (Fedwire).

(b) "Automated clearinghouse" means any federal reserve bank, or an organization established in agreement with the National Automated Clearing House Association, that operates as a clearinghouse for transmitting or receiving entries between banks or bank accounts and which authorizes an electronic transfer of funds between these banks or bank accounts.

(c) "Automated clearinghouse debit" means a transaction in which the state, through its designated depository bank, originates an automated clearinghouse transaction debiting the person's bank account and crediting the state's bank account for the amount of tax. Banking costs incurred for the automated clearinghouse debit transaction shall be paid by the state.

(d) "Automated clearinghouse credit" means an automated clearinghouse transaction in which the person through his or her own bank, originates an entry crediting the state's bank account and debiting his or her own bank account. Banking costs incurred for the automated clearinghouse credit transaction charged to the state shall be paid by the person originating the credit.

(e) "Fedwire transfer" means any transaction originated by a person and utilizing the national electronic payment system to transfer funds through the federal reserve banks, when that person debits his or her own bank account and credits the state's bank account. Electronic funds transfers pursuant to Section 8760 may be made by Fedwire only if payment cannot, for good cause, be made according to subdivision (a), and the use of Fedwire is preapproved by the board. Banking costs incurred for the Fedwire transaction charged to the person and to the state shall be paid by the person originating the transaction.

8763. Electronic filing. (a) Any return, declaration, statement, or other document required to be made under this part that is filed using electronic media shall be filed and authenticated pursuant to any method or form the board may prescribe.

(b) Notwithstanding any other law, any return declaration, statement, or other document otherwise required to be signed that is filed by the taxpayer using electronic media in a form as required by the board shall be deemed to be a signed, valid original document, including upon reproduction to paper form by the board.

(c) Electronic media includes, but is not limited to, computer modem, magnetic media, optical disk, facsimile machine, or telephone.

History.—Added by Stats. 2002, Ch. 459 (AB 1936), in effect Janaury 1, 2003.

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Article 2. Deficiency Determinations

8776. Power of board in determinations. If the board is dissatisfied with the return filed, it may compute and determine the amount to be paid upon the basis of any information available to it. One or more deficiency determinations may be made of the amount of tax due for one or for more than one month. When a business is discontinued a determination may be made at any time thereafter, within the periods specified in Section 8782, as to liability arising out of that business, irrespective of whether the determination is issued prior to the due date of the liability as otherwise specified in this part.

History.—Stats. 1957, p. 3770, in effect September 11, 1957, added third sentence. Stats. 1963, p. 1436, in effect September 20, 1963, substituted "return" for "report."

8777. Interest on determinations. The amount of the determination, exclusive of penalties, shall bear interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the last day of the calendar month following the reporting period for which the amount of the tax, or any portion thereof, should have been reported until the date of payment.

History.—Stats. 1954, p. 113, in effect April 20, 1954, substituted "twenty-fifth" for "fifteenth" day. Stats. 1967, p. 1380, operative December 1, 1967, substituted "last day of the month following" for "twenty-fifth day after the close of" the month. Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted . . . 19269" for "rate . . . thereof" before "from." Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "last" before "day." Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified . . . thereof" for "adjusted annual rate" before "established," substituted "Section 6591.5" for "Section 19269." Stats. 1995, Ch. 555, in effect January 1, 1996, deleted "annual" after "the modified adjusted" and substituted "last day of the calendar month following the reporting period" for "25th day of the month following the month" after "6591.5, from the".

8778. Offset. In making a determination the board may offset overpayments for a month or months against underpayments for another month or months and against the interest and penalties on the underpayments.

8779. Penalty in case of negligence. If any part of the deficiency for which a deficiency determination is made is due to negligence or intentional disregard of this part or the rules and regulations adopted under this part, a penalty of 10 percent of the amount of the determination shall be added thereto.

History.—Stats. 1957, p. 3770, in effect September 11, 1957, substituted a penalty of "10" for "25" percent.

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8780. Penalty in case of fraud. If any part of the deficiency for which a deficiency determination is made is due to fraud or an intent to evade this part or the rules and regulations adopted under this part, a penalty of 25 percent of the amount of the determination shall be added thereto.

History.—Stats. 1957, p. 3770, in effect September 11, 1957, substituted a penalty of "25" for "50" percent.

8781. Service of notice. The board shall give the user written notice of its determination. The notice shall be placed in a sealed envelope, with postage paid, addressed to the user at his address as it appears in the records of the board. The giving of notice shall be deemed complete at the time of the deposit of the notice in the United States Post Office, or a mailbox, sub-post office, substation or mail chute or other facility maintained or provided by the United States Postal Service, without extension of time for any reason. In lieu of mailing, a notice may be served personally by delivering to the person to be served and service shall be deemed complete at the time of such delivery. Personal service to a corporation may be made by delivery of a notice to any person designated in the Code of Civil Procedure to be served for the corporation with summons and complaint in a civil action.

History.—Stats. 1957, p. 3770, in effect September 11, 1957, added the provision that the service was complete upon mailing. Stats. 1974, Ch. 610, effective January 1, 1974, revised and expanded the section and deleted the reference to section 1013 of the C.C.P.

8782. Time within which notice must be given. Except in the case of fraud, intent to evade the tax, or failure to make a return, every notice of a deficiency determination shall be given within three years after the last day of the calendar month following the period for which the return was due or within three years after the return is filed, whichever period expires later. If the user fails to make a return, the notice of determination shall be mailed within eight years after the last day of the month following the period for which the return was due.

History.—Stats. 1953, p. 3598, in effect September 9, 1953, added alternative of three years after the report is filed, if later, Stats. 1957, p. 3771, in effect September 11, 1957, added second sentence. Stats. 1963, p. 1437, in effect September 20, 1963, substituted "return" for "report" in both sentences. Stats. 1969, p. 894, in effect November 10, 1969, substituted "the last day of the month following the month for which the return was due" for "the date when the amount should have been reported" and "the date the return was due". Stats. 1978, Ch. 827, effective January 1, 1979, in the first and second sentences substituted "period" for "month" following "day of the". Stats. 1979, Ch. 260, effective July 17, 1979, in the first and second sentences, substituted "month" for "period" following "day of the" and substituted "period" for "month" following "following the". Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "last" before "day" in the first sentence. Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "last day of the calendar" for "25th day of the" after "years after the" and deleted "the" after "whichever period expires" in the first sentence.

8782.1. Limitation; deficiency determination; decedent. In the case of a deficiency arising under this part during the lifetime of a decedent, a notice of deficiency determination shall be mailed within four months after written request therefor, in the form required by the board, by the fiduciary of the estate or trust or by any other person liable for the tax or any portion thereof.

History.—Added by Stats. 1968, p. 2449, in effect November 13, 1968.

8783. Waiver. If before the expiration of the time prescribed in Section 8782 for the mailing of a notice of deficiency determination the taxpayer has consented in writing to the mailing of the notice after such time, the notice may be mailed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

History.—Added by Stats. 1957, p. 3771, in effect September 11, 1957.

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Article 3. Determinations If No Return Made

8801. Determination; failure to make return; penalty. If any user fails to make a return, the board shall make an estimate of the amount of fuel used by the user which is subject to the tax. The estimate shall be made for the month or months in respect to which the user failed to make a return and shall be based upon any information available to the board. Upon the basis of this estimate the board shall compute and determine the amount required to be paid to the State, adding to the sum thus fixed a penalty equal to 10 percent thereof. One or more determinations may be made for one or for more than one month.

History.—Stats. 1954, p. 114, in effect April 20, 1954, substituted a penalty of "10" for "25" percent. Stats. 1963, p. 1437, in effect September 20, 1963, substituted "return" for "report."

8802. Offset. In making a determination the board may offset overpayments for a month or months against underpayments for another month or months and against interest and penalties on the underpayments.

8803. Interest. The amount of the determination, exclusive of penalties, shall bear interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the last day of the calendar month following the reporting period for which the amount, or any portion thereof, should have been reported until the date of payment.

History.—Stats. 1954, p. 114, in effect April 20, 1954, substituted "twenty-fifth" for "fifteenth" day. Stats. 1967, p. 1380, operative December 1, 1967, substituted "last day of the month following" for "twenty-fifth day after the close of" the month. Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted . . . 19269" for "rate . . . thereof" before "from." Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "last" before "day." Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified . . . thereof" for "adjusted annual rate," substituted "Section 6591.5" for "Section 19269." Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "last day of the calendar month following the reporting period" for "25th day of the month following the month" after "6591.5, from the".

8804. Penalties. If the failure of a user to file a return is due to fraud or an intent to evade the tax, a penalty of 25 percent of the amount required to be paid by the user, exclusive of penalties, shall be added thereto in additon to the 10-percent penalty provided in Section 8801.

History.—Stats. 1954, p. 114, in effect April 20, 1954, substituted a penalty of "10" for "25" percent. Stats. 1957, p. 3771, in effect September 11, 1957, substituted a penalty of "25" for "50" percent. Stats. 1963, p. 1437, in effect September 20, 1963, substituted "return" for "report."

8805. Notice of determination. Promptly after making its determination the board shall give to the user written notice of its estimate and determination, the notice to be served personally or by mail in the manner prescribed for service of notice of a deficiency determination.

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Article 4. Jeopardy Determinations

8826. Jeopardy determinations. If the board believes that the collection of any amount of excise tax imposed under this part will be jeopardized by delay, it shall thereupon make a determination of the amount of tax, noting that fact upon the determination. The amount determined is immediately due and payable.

8827. Interest and penalty. If the amount of the tax, interest, and penalty specified in the jeopardy determination is not paid within 10 days after service upon the user of notice of the determination, the determination becomes final, unless a petition for redetermination is filed within the 10 days, and the delinquency penalty and interest provided in Article 6 of this chapter shall attach to the amount specified.

8828. Petition for redetermination; security. The user against whom a jeopardy determination is made may petition for the redetermination thereof pursuant to Article 5 of this chapter. He shall, however, file the petition for redetermination with the board within 10 days after the service upon him of notice of the determination. The user shall at the time of filing the petition for redetermination deposit with the board such security as it may deem necessary to insure compliance with this part. The security may be sold by the board in the manner prescribed by Section 8951.

History.—Stats. 1945, p. 1438, in effect September 15, 1945, substituted "at the time of filing the petition for redetermination" for "also within the 10-day period."

8828.5. Administrative hearing. In accordance with such rules and regulations as the board may prescribe, the person against whom a jeopardy determination is made may apply for an administration hearing for one or more of the following purposes:

(a) To establish that the determination is excessive; or

(b) To establish that the sale of property that may be seized after issuance of the jeopardy determination or any part thereof shall be delayed pending the administrative hearing because the sale would result in irreparable injury to the person; or

(c) To request the release of all or a part of the property to the person; or

(d) To request a stay of collection activities.

The application shall be filed within 30 days after service of the notice of jeopardy determination and shall be in writing and state the specific factual and legal grounds upon which it is founded. No security need be posted to file the application and to obtain this hearing. However, if the person does not deposit within the 10-day period prescribed in Section 8828, such security as the board may deem necessary to ensure compliance with this part, the filing of the application shall not operate as a stay of collection activities, except sale of property seized after issuance of the jeopardy determination. Upon a showing of good cause for failure to file a timely application for administrative hearing, the board may allow a filing of the application and grant the person an administrative hearing. The filing of an application pursuant to this section shall not affect provisions of Section 8827 relating to the finality date of the determination or to penalty or interest.

History.—Added by Stats. 1977, Ch. 329, operative January 1, 1978.

8829. Service of notice. Any notice required by this article may be served personally or by mail in the manner prescribed for service of notice of a deficiency determination.

History.—Added by Stats. 1965, p. 4441, in effect September 17, 1965.

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Article 5. Redeterminations

8851. Petition for redetermination. Any user against whom a determination is made under Article 2 (commencing with Section 8776) or 3 (commencing with Section 8801) may petition for a redetermination within

30 days after service upon the user of notice thereof. If a petition for redetermination is not filed within the 30-day period, the determination becomes final at the expiration of the period.

History.—Stats. 1957, p. 3771, in effect September 11, 1957, substituted "30" for "15" days. Stats. 1984, Ch. 193, added "(commencing with Section 8776)" after "Article 2," added "(commencing with Section 8801)" after "or 3," deleted "of this chapter" before "may petition."

8851.5. Form and content. Every petition for redetermination shall be in writing and shall state the specific grounds upon which the petition is founded. The petition may be amended to state additional grounds at any time prior to the date on which the board issues its order or decision upon the petition for redetermination.

History.—Added by Stats. 1967, p. 2328, in effect November 8, 1967.

8852. Oral hearing. If a petition for redetermination is filed within the 30-day period, the board shall reconsider the determination and, if the user has so requested in his petition, shall grant him an oral hearing and shall give him 10 days' notice of the time and place of the hearing. The board may continue the hearing from time to time as may be necessary.

History.—Stats. 1957, p. 3771, in effect September 11, 1957, substituted "30" for "15" day period.

8852.5. Decrease or increase of determination. The board may decrease or increase the amount of the determination before it becomes final, but the amount may be increased only if a claim for the increase is asserted by the board at or before the hearing. Unless the penalty imposed by Section 8780 or Section 8804 applies to the amount of the determination as originally made or as increased, the claim for increase must be asserted within eight years after the last day of the month following the month for which the return for the period for which the increase is asserted was due or within eight years after the return was filed, whichever period expires the later.

History.—Added by Stats. 1957, p. 3771, in effect September 11, 1957. Stats. 1969, p. 894, in effect November 10, 1969, added the second sentence.

8853. Decision; final date. The order or decision of the board upon a petition for redetermination becomes final 30 days after mailing of notice thereof.

History.—Stats. 1957, p. 3771, in effect September 11, 1957, substituted "30" for "15" days.

8854. Due date of determination; penalty. All determinations made by the board under Articles 2 or 3 of this chapter are due and payable at the time they become final. If they are not paid when due and payable, a penalty of 10 percent of the amount of the determination, exclusive of interest and penalties, shall be added thereto.

History.—Stats. 1954, p. 114, in effect April 20, 1954, substituted a penalty of "10" for "25" percent.

8855. Service of notice. Any notice required by this article shall be served personally or by mail in the manner prescribed for service of notice of a deficiency determination.

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Article 6. Interest and Penalties

8876. Interest and penalties. (a) Any user who fails to pay any tax, except taxes determined by the board under Article 2 (commencing with Section 8776) or Article 3 (commencing with Section 8801), within the time required shall pay a penalty of 10 percent of the amount of the tax, together with interest on that tax at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax became due and payable until the date of payment.

(b) Any user who fails to file a return in accordance with the due date set forth in Section 8751 or the due date established by the board in accordance with Section 8755, shall pay a penalty of 10 percent of the amount of the tax with respect to the period for which the return is required.

(c) The penalties imposed by this section shall be limited to a maximum of 10 percent of the tax for which the return is required for any one return.

History.—Stats. 1953, p. 3598, in effect September 9, 1953, substituted penalty of "10" for "25" percent. Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "(commencing . . . 8801)" for "or 3" after "Article 2" and "adjusted . . . 19269" for "rate . . . thereof" before "from." Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified . . . thereof" for "adjusted annual rate" before "established", substituted "Section 6591.5" for "Section 19269." Stats. 1995, Ch. 555, in effect January 1, 1996, deleted "of this chapter" after "with Section 8801)" and substituted "or fifty dollars . . . on that tax" for ", in addition to the tax, plus interest" after "of the tax". Stats. 1996, Ch. 1087, in effect January 1, 1997, deleted "or fifty dollars ($50), whichever is greater" after "amount of the tax". Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001, added subdivision letter designation (a) before the former sole paragraph, and added subdivisions (b) and (c).

8876.5. Interest; daily basis. (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 was due until the date of payment, if all of the following occur:

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

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

(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, a determination where no return has been filed, or a jeopardy determination issued by the board.

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

(g) This section shall be operative only until January 1, 2016.

History.—Added by Stats. 2010, Ch. 316 (SB 1028), in effect January 1, 2011.

Note.—SEC. 1. of Stats. 2010, Ch. 316 (SB 1028), in effect January 1, 2011, states: "It is the intent of the Legislature that California's penalty and interest provisions foster and maintain the current high level of compliance, provide appropriate costs and sanctions for noncompliance, and provide a reasonable and administrable degree of latitude for individual taxpayer circumstances and errors. It is the intent of the Legislature in enacting this act, that the State Board of Equalization strictly and narrowly apply its provisions on a case-by-case basis and only in special circumstances."

8877. Reasonable cause for delay; relief. (a) If the board finds that a person's failure to make a timely return or payment is due to reasonable cause and circumstances beyond the person's control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the penalty provided by Sections 8760, 8801, 8854, and 8876.

(b) Except as provided in subdivision (c), any person seeking to be relieved of the penalty 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.

(c) The board shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

History.—Added by Stats. 1963, p. 2846, in effect September 20, 1963. Stats. 1983, Ch. 1102, in effect September 27, 1983, added "8756.5," after "8801" in the first paragraph. Stats. 1984, Ch. 512, effective July 17, 1984, operative July 1, 1985, added "secure a . . . permit or to" after "person's failure to," added "8701" after "Sections" near the end of first paragraph, changed "he" to "he or she" and "his" to "his or her" in second paragraph. Stats. 1989, Ch. 768, in effect January 1, 1990, added "8854,", after "8801," in the first paragraph. Stats. 1999, Ch. 941 (SB 1231), in effect January 1, 2000, deleted "secure a use fuel tax permit or to" after "person's failure to" and deleted "8701, 8756.5" after "provided by Sections" in the first paragraph. Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001, added subdivision letter designation (a) before first paragraph, added "8760," after "provided by Sections" in subdivision (a); added subdivision letter designation (b) before second paragraph, added "Except as provided in subdivision (c), any" in the first sentence of subdivision (b); and added subdivision (c).

8878. Relief from interest; disaster. If the board finds that a person's failure to make a timely return or payment was due to a disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the interest provided by Sections 8754, 8760, 8803, and 8876.

Any person seeking to be relieved of the 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.

History.—Added by Stats. 1981, Ch. 947, in effect January 1, 1982. Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001, substituted "8760, 8803" for "8803" after "provided by Sections" in the first paragraph, and added "or she" after "upon which he" and added "or her" after "bases his" in the second paragraph. Stats. 2001, Ch. 251 (AB 1123), in effect January 1, 2002, added "8754" after "interest provided by Sections" in the first paragraph.

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8878.5. Relief of interest. (a) The board, in its discretion, may relieve all or any part of the interest imposed on a person by this part where the failure to pay tax is due in whole or in part to an unreasonable error or delay by an employee of the board acting in his or her official capacity.

(b) For purposes of this section, an error or delay shall be deemed to have occurred only if no significant aspect of the error or delay is attributable to an act of, or a failure to act by, the taxpayer.

(c) Any person seeking relief under this section shall file with the board a statement under penalty of perjury setting forth the facts on which the claim for relief is based and any other information which the board may require.

(d) The board may grant relief only for interest imposed on tax liabilities that arise during taxable periods commencing on or after January 1, 2000.

History.—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000. Stats. 2001, Ch. 251 (AB 1123), in effect January 1, 2002, substituted "this part" for "Sections 8803 and 8876" after "imposed on a person by" in subdivision (a).

8879. Penalty interest rates. [Repealed by Stats. 1985, Ch. 20, effective March 29, 1985, operative July 1, 1985.]

8879. Reasonable reliance on written advice; relief of tax, penalty, and interest. (a) If the board finds that a person's failure to make a timely return or payment is due to the person's reasonable reliance on written advice from the board, the person may be relieved of the taxes imposed by this part and any penalty or interest thereto.

(b) For purposes of this section, a person's failure to make a timely return or payment shall be considered to be due to reasonable reliance on written advice from the board, only if the board finds that all of the following conditions are satisfied:

(1) The person requested in writing that the board advise him or her whether a particular activity or transaction is subject to tax under this part. The specific facts and circumstances of the activity or transaction shall be fully described in the request.

(2) The board responded in writing to the person regarding the written request for advice, stating whether or not the described activity or transaction is subject to tax, or stating the conditions under which the activity or transaction is subject to tax.

(3) The liability for taxes applied to a particular activity or transaction which occurred before either of the following:

(A) Before the board rescinded or modified the advice so given, by sending written notice to the person of rescinded or modified advice.

(B) Before a change in statutory or constitutional law, a change in the board's regulations, or a final decision of a court, which renders the board's earlier written advice no longer valid.

(c) Any person seeking relief under this section shall file with the board all of the following:

(1) A copy of the person's written request to the board and a copy of the board's written advice.

(2) A statement under penalty of perjury setting forth the facts on which the claim for relief is based.

(3) Any other information which the board may require.

(d) Only the person making the written request shall be entitled to rely on the board's written advice to that person.

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8880. Relief of spouse. (a) Under regulations prescribed by the board, if:

(1) A tax liability under this part was understated by a failure to file a return required to be filed under this part, by the omission of an amount properly includable therein, or by erroneous deductions or credits claimed on a return, and the understatement of tax liability is attributable to one spouse; or any amount of the tax reported on a return was unpaid and the nonpayment of the reported tax liability is attributable to one spouse.

(2) The other spouse establishes that he or she did not know of, and had no reason to know of, that understatement or nonpayment.

(3) Taking into account whether or not the other spouse significantly benefited directly or indirectly from the understatement or the nonpayment and taking into account all other facts and circumstances, it is inequitable to hold the other spouse liable for the deficiency in tax attributable to that understatement or nonpayment, then the other spouse shall be relieved of liability for tax (including interest, penalties, and other amounts) to the extent that the liability is attributable to that understatement or nonpayment of tax.

(b) For purposes of this section, the determination of the spouse to whom items of understatement or nonpayment are attributable shall be made without regard to community property laws.

(c) This section shall apply to all calendar quarters subject to the provisions of this part, but shall not apply to any calendar quarter that is more than five years from the final date on the board-issued determination, five years from the return due date for nonpayment on a return, or one year from the first contact with the spouse making a claim under this section; or that has been closed by res judicata, whichever is later.

(d) For purposes of paragraph (2) of subdivision (a), "reason to know" means whether or not a reasonably prudent person would have had reason to know of the understatement or nonpayment.

(e) For purposes of this section, with respect to a failure to file a return or an omission of an item from the return, "attributable to one spouse" may be determined by whether a spouse rendered substantial service as a user using taxable fuel or a vendor selling taxable fuel to which the understatement is attributable. If neither spouse rendered substantial services as a user or a vendor, then the attribution of applicable items of understatement shall be treated as community property. An erroneous deduction or credit shall be attributable to the spouse who caused that deduction or credit to be entered on the return.

(f) Under procedures prescribed by the board, if, taking into account all the facts and circumstances, it is inequitable to hold the other spouse liable for any unpaid tax or any deficiency (or any portion of either) attributable to any item for which relief is not available under subdivision (a), the board may relieve the other spouse of that liability.

(g) For purposes of this section, registered domestic partners, as defined in Section 297 of the Family Code, have the same rights, protections, and benefits as provided by this section, and are subject to the same responsibilities, obligations, and duties as imposed by this section, as are granted to and imposed upon spouses.

(h) The relief provided by this section shall apply retroactively to liabilities arising prior to the effective date of this section.

History.—Added by Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008.

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