Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2012
 

Cigarette and Tobacco Products Tax Law

CHAPTER 6. OVERPAYMENTS AND REFUNDS.


CHAPTER 6. OVERPAYMENTS AND REFUNDS.

Article 1. Claim for Refund

30361. Credits and refunds. If the board determines that any amount not required to be paid under this part has been paid by any person, the board shall set forth that fact in its records and certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom it was 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. 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.

History.—Stats. 1963, p. 3112, in effect September 20, 1963, added the words "from whom the excess amount was collected or by whom it was paid" in the first paragraph, and substituted "two hundred fifty dollars ($250)" for "one hundred dollars ($100)" in the second paragraph. Stats. 1965, p. 2057, in effect September 17, 1965, substituted "one thousand dollars ($1,000)" for "two hundred fifty dollars ($250)" in the last paragraph. Stats. 1968, p. 1199, in effect November 13, 1968, revised this section and deleted "assigns" from the persons listed in the first paragraph to whom refunds shall be made. Stats. 1977, Ch. 921, operative January 1, 1978, substituted "five thousand dollars ($5,000)" for "one thousand dollars ($1,000)". Stats. 1985, Ch. 591, effective January 1, 1986, substituted "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" in second paragraph. Stats. 1988, Ch. 1029, in effect ($15,000)"following "amount not exceeding" and added "or her" following "his" in the first and second paragraphs. Stats. 1994, Ch. 726, in effect September 22, 1994, deleted "to the State Board of Control" after "records and certify"; substituted "The" for "If approved by the State Board of Control, the" before "excess amount collected"; added "Any proposed determination . . . of that determination" as the second sentence; and deleted the second paragraph which read: "In the case, however, of a determination by the board that an amount not exceeding fifty thousand dollars ($50,000) was not required to be paid under this part, the board without obtaining the approval of the State Board of Control may credit the amount on any amounts then due and payable under this part from the person by whom the amount was paid and may refund the balance to the person or his or her successors, administrators, or executors."

Note.—Stats. 1971, p. 1785, in effect October 6, 1971, provides a distributor, wholesaler or dealer whose stock of tax-paid cigarettes were destroyed or damaged so that they could not be sold as a result of the earthquakes occurring in southern California between January 1, 1971, and March 1, 1971, may file a claim for refund of the tax paid with respect to such cigarettes by the distributor, wholesaler or dealer. No refund shall be allowed after one year from the effective date of this act unless a claim for refund has been filed within such period.

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30361.5. Excess tax reimbursement; tobacco products. When an amount represented by a person to a customer as constituting reimbursement for taxes upon the distribution of tobacco products pursuant to this part is computed upon an amount that is not taxable or is in excess of the tax 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 State Board of Equalization or the customer that an excess has been ascertained. If the person fails or refuses to do so, the amount so paid, if knowingly or mistakenly computed by the person upon an amount that is not subject to the tax imposed by this part or that is in excess of the tax amount, shall be remitted by that person to this state. Those amounts remitted to the state by the person shall be credited by the board to any amounts due and payable from that customer that are subject to this part and that are based on the same activity, and the balance, if any, shall constitute an obligation due from the person to this state.

History.—Added by Stats. 2005, Ch. 512 (AB 892), in effect January 1, 2006.

30362. Claim; limitations period. (a) Except as provided in subdivision (b) no refund shall be approved by the board after three years from the 25th day after the close of the monthly period for which the overpayment was made, or, with respect to a determination made under Chapter 4 of this part, after six months from the date the determination becomes 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 such a period. No credit shall be approved by the board after the expiration of such period unless a claim for credit is filed with the board within such period, or unless the credit relates to a period for which a waiver is given pursuant to Section 30208.

(b) A refund may be approved by the board for any period for which a waiver is given under Section 30208 if a claim therefor is filed with the board before the expiration of the period agreed upon.

History.—Stats. 1965, p. 4442, in effect September 17, 1965, revised this section to provide for a credit and refund when a waiver is given pursuant to § 30208. Stats. 1968, p. 1102, in effect November 13, 1968, substituted "25th" for "15th".

30362.1. Claim limitation; financially disabled. (a) The limitation period specified in Section 30362 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 which can be expected to result in death or which 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 the operation or rule of law, including res judicata, as of the effective date of the act adding this section.

History.—Added by Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001.

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30363. Form and content of claim. Every claim for refund or credit shall be in writing and shall state the specific grounds upon which it is founded.

30364. Failure to file claim. Failure to file a claim within the time prescribed in this article constitutes a waiver of all demands against the State on account of the overpayment.

30365. Notice of action. Within 30 days after disallowing any claim in whole or in part, the board shall serve written notice of its action on the claimant in the manner prescribed for the service of a notice of a deficiency determination.

30366. Interest. Interest shall be computed, allowed, and paid upon any overpayment of any amount of tax at the modified adjusted rate per month established pursuant to Section 6591.5, from the 26th day of the calendar month following the period during which the overpayment was made. In addition, a refund or credit shall be made of any interest imposed upon the claimant with respect to the amount being refunded or credited.

The interest shall be paid as follows:

(a) In the case of a refund, to the 25th day of the calendar month following the date upon which the claimant, 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 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.

History.—Stats. 1963, p. 3113 in effect September 20, 1963, substituted "15th" for "fifteenth" in the first paragraph and in subdivision (a). Stats. 1967, p. 2521, operative August 1, 1967, substituted "20th" for "15th" in two places. Stats. 1968, p. 1102, in effect November 13, 1968, substituted "25th" for "20th" in two places. 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 . . . month" before "from" in the first paragraph. Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified . . . month" for "adjusted annual rate" before "established," substituted "Section 6591.5" for "Section 19269." Stats. 1992, Ch. 1336, in effect January 1, 1993, substituted "26th" for "25th" after "from the", deleted "monthly" before "period", substituted "during" for "for" after "period", and substituted ". In addition, a" for "but no" in the first sentence; and added "as follows" after "paid" in the second paragraph. Stats. 1996, Ch. 320, in effect January 1, 1997, deleted "or the date upon which the claim is certified to the State Board of Control, whichever date is the earlier" after "may be filed" in subdivision (a). Stats. 1997, Ch. 620 (SB 1102), in effect January 1, 1998, added ", if he or she has not already filed a claim," after "which the claimaint" and added "or the date . . . date is earlier" after "may be filed" in subdivision (a).

30367. Disallowance of interest. (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.

History.—Stats. 1998, Ch. 420 (SB 2230), in effect January 1, 1999, added subdivision designation "(a)" and added subdivision (b).

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Article 2. Recovery of Erroneous Refunds

30381. Erroneous refund. Actions. (a) The board may recover any refund or part thereof that is erroneously made, and any credit or part thereof that is erroneously allowed, in an action brought in a court of competent jurisdiction in the county of Sacramento in the name of the people of the State of California.

(b) As an alternative to subdivision (a), the board may recover any refund or part thereof that is erroneously made, and any credit or part thereof that is erroneously allowed. In recovering any erroneous refund or credit, the board may, in its discretion, issue a deficiency determination in accordance with Article 3 (commencing with Section 30173) of Chapter 3.5, or Article 2 (commencing with Section 30201) or Article 4 (commencing with Section 30241) of Chapter 4. Except in the case of fraud, the deficiency determination shall be made by the board within three years from the date of the Controller's warrant or date of credit.

History.—Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, added subdivision designation "(a)", substituted "that" for "which" after "or part thereof" and substituted "the county of Sacramento" for "any city or county in this State in which the Attorney Genernal has an office," after "competent jurisdiction in" in subdivision (a); and added subdivision (b).

Note.—SEC. 61. of Stats. 1998, Ch. 609 (SB 2232), effective January 1, 1999, states: It is the intent of the Legislature in enacting those provisions of this act that allow the State Board of Equalization to recover refunds administratively that no increase in taxpayer costs result from taxpayer compliance with these provisions.

30382. Place of trial. In any action brought pursuant to subdivision (a) of Section 30381, the court may, with the consent of the Attorney General, order a change in the place of trial.

History.—Added by Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999.

30383. Rules of procedure, etc. The Attorney General shall prosecute any action brought pursuant to subdivision (a) of Section 30381, and the provisions of the Code of Civil Procedure relating to service of summons, pleadings, proofs, trials, and appeals shall apply to the proceedings.

History.—Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, substituted "any action brought . . . of Section 30381," for "the action" after "General shall prosecute" and substituted "shall apply" for "are applicable" after "trials, and appeals".

30384. Interest on erroneous refunds. (a) Notwithstanding any other provision of this part, if the board finds that neither the person liable for payment of tax nor any party related to that person has in any way caused an erroneous refund for which an action for recovery is provided under Section 30381, no interest shall be imposed on the amount of that erroneous refund until 30 days after the date on which the board mails a notice of determination for repayment of the erroneous refund to the person. The act of filing a claim for refund shall not be considered as causing the erroneous refund.

(b) This section shall be operative for any action for recovery under Section 30381 on or after January 1, 2000.

History.—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000.

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Article 3. Suit for Refund

30401. Enjoining collection forbidden. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against this State or against any officer of the State to prevent or enjoin the collection under this part of any tax or any amount of tax required to be collected.

30402. Necessity of refund claim. No suit or proceeding shall be maintained in any court for the recovery of any amount alleged to have been erroneously or illegally determined or collected unless a claim for refund or credit has been duly filed.

30403. Action for refund; limitation. Within 90 days after the mailing of the notice of the board's action upon a claim for refund or credit, the claimant may bring an action against the board on the grounds set forth in the claim in a court of competent jurisdiction in any city or county in the State in which the Attorney General has an office for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.

30404. When refund claim not acted upon. If the board fails to mail notice of its action on a claim within six months after the claim is filed, the claimant may, prior to the mailing of notice by the board of its action on the claim, consider the claim disallowed and bring an action against the board on the grounds set forth in the claim for the recovery of the whole or any part of the amount claimed as an overpayment.

30405. Failure to bring suit within time. Failure to bring a suit or an action within the time specified in this article constitutes a waiver of all demands against the State on account of an alleged overpayment.

30406. Disposition of amount of judgment; interest. If judgment is rendered for the plaintiff, the amount of the judgment shall first be credited on any amounts due from the plaintiff under this part, and the balance of the judgment shall be refunded to the plaintiff. In any judgment, interest shall be allowed at the modified adjusted rate per annum established pursuant to Section 6591.5, upon the amount found to have been illegally collected from the date of payment of the amount to the date of allowance of credit on account of the judgment or to a date preceding the date of the refund warrant by not more than 30 days, the date to be determined by the board.

History.—Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "12 percent" for "6 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted . . . 19269" for "rate . . . annum" before "upon" in the second sentence. Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified . . . annum" for "adjusted annual rate," substituted "Section 6591.5" for "Section 19269."

30407. Judgment for assignee forbidden. A judgment shall not be rendered in favor of the plaintiff in any action brought against the board to recover any amount paid when the action is brought by or in the name of an assignee of the person making the payment or by any person other than the person making the payment.

Shareholders lack standing to recover taxes paid by corporation on their behalf.—Shareholders lacked standing to recover taxes paid by the corporation on their behalf because refunds may be made only to the party who paid the tax. BOE's acceptance of payments from the corporation on the shareholders' behalf did not equitably estop BOE from raising the standing issue. Parmar v. Board of Equalization (2011) 196 Cal.App.4th 705.

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Article 4. Cancellations

30421. Cancellation of determination. If any amount has been illegally determined, the board shall set forth that fact in its records, certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made and authorize the cancellation of the amount upon the records of the board. 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.

History.—Stats. 1963, p. 3113, in effect September 20, 1963, added the words "that fact" in the first sentence, and substituted "two hundred fifty dollars ($250)" for "one hundred dollars ($100)" in the first and last sentences. Stats. 1965, p. 2058, in effect September 17, 1965, substituted "one thousand dollars ($1,000)" for "two hundred fifty dollars ($250)" in the first and last sentences. Stats. 1977, Ch. 921, operative January 1, 1978, substituted "five thousand dollars ($5,000)" for "one thousand dollars ($1,000)". Stats. 1985, Ch. 591, effective January 1, 1986, substituted "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" after "in excess of" and "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" after "not exceeding." Stats. 1988, Ch. 1029, in effect January 1, 1989, substituted "fifty thousand dollars ($50,000)" for "fifteen thousand dollars ($15,000)" before "has been illegally determined" in the first and last sentences. Stats. 1994, Ch. 726, in effect September 22, 1994, deleted "in excess of fifty thousand dollars ($50,000)" after "If any amount"; substituted a comma for "and" after "in its records"; deleted "to the State Board of Control" after "certify"; added "to be" after "amount determined"; deleted ". If the State Board of Control approves, it shall" after "determination was made"; and substituted "Any proposed determination . . . of that determination" for "If an amount not exceeding fifty thousand dollars ($50,000) has been illegally determined, either by the person filing a return or by the board, the board without certifying this fact to the State Board of Control shall authorize the cancellation of the amount upon the records of the board."