Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales And Use Tax Court Decisions


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Sprint Communications Co. v. State Board of Equalization . . . (1995)

The Board Can Properly Reduce Amounts Awarded Under a Claim for Refund by Deficiencies Owed for the Period Covered by the Claim

The Court of Appeal held that the Board properly reduced amounts awarded under timely filed claims for refund by deficiencies that occurred during the periods covered by the claim for refund, even though the deficiencies were offset after the expiration of both the statute of limitations and agreements extending the time for assessing such deficiencies. The court reasoned that under the doctrine of "equitable setoff," a claim for refund "throws open the taxpayer's entire tax liability for the period in question." Applying this doctrine, the court held that even though the Board was barred by the statute of limitations from issuing a deficiency assessment attributable to one reporting period, it was proper for the Board to apply that underpayment against an overpayment in a different reporting period, provided both periods are covered by the claim for refund. However, the court ruled that this doctrine could not be used to allow a claim for refund to set off a deficiency assessment attributable to a period barred by the statute of limitations if the barred period was not included in the claim for refund. Sprint Communications Company v. State Board of Equalization (1995) 40 Cal.App.4th 1254.