Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales And Use Tax Law

CHAPTER 5. DETERMINATIONS

Article 6. Interest and Penalties

Section 6597

6597. Penalty; tax reimbursement collected and not timely remitted.

(a) (1) Any person who knowingly collects sales tax reimbursement, as defined in Section 1656.1 of the Civil Code, or who knowingly collects use tax pursuant to Chapter 3 (commencing with Section 6201), and who fails to timely remit that sales tax reimbursement or use tax to the board, shall be liable for a penalty of 40 percent of the amount not timely remitted.

(2) (A) This subdivision shall not apply to any person whose liability for the unremitted sales tax reimbursement or use tax described in paragraph (1) averages one thousand dollars ($1,000) or less per month or does not exceed 5 percent of the total amount of tax liability for which the tax reimbursement was collected for the period in which tax was due, whichever is greater.

(B) If a person's failure to make a timely remittance of sales tax reimbursement or use tax is due to a reasonable cause or circumstances beyond the person's control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person shall be relieved of the penalty imposed by this subdivision.

(b) For purposes of this section:

(1) "Reasonable cause or circumstances beyond the person's control" includes, but is not limited to, any of the following:

(A) The occurrence of a death or serious illness of the person or the person's next of kin that caused the person's failure to make a timely remittance.

(B) The occurrence of an emergency, as defined in Section 8558 of the Government Code that caused the person's failure to make a timely remittance.

(C) A natural disaster or other catastrophe directly affecting the business operations of the person that caused the person's failure to make a timely remittance.

(D) The board failed to send returns or other information to the correct address of record, that caused the person's failure to make a timely remittance.

(E) The person's failure to make a timely remittance occurred only once over a three-year period, or once during the period in which the person was engaged in business, whichever time period is shorter.

(F) The person voluntarily corrected errors in remitting sales tax reimbursement or use tax collected that were made in previous reporting periods and remitted payment of the liability owed as a result of those errors prior to being contacted by the board regarding possible errors or discrepancies.

(2) "Sales tax reimbursement" shall also include any sales tax that is advertised, held out, or stated to the public or to any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the retailer.

(c) This section shall apply to any determination made by the board pursuant to Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), and Article 4 (commencing with Section 6536).

History.—Added by Stats. 2006, Ch. 252 (SB 1449), in effect January 1, 2007.