Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 380.0035

380.0035 Impact of MVF Tax Refunds on Sales and Use Tax. Motor Vehicle Fuel is purchased with MVF tax and sales and use tax paid in a county that does not impose district tax and is used off-highway in a county that does impose a district tax. The MVF tax is found to be subject to refund. Since MVF tax is includable in the measure of sales and use tax, its refund results in an over-payment of the State and Local sales tax. However, the use of the fuel in the district that imposes a tax results in a liability for district use tax.

In the past, the Controller's office has made the refunds of the MVF tax and the sales tax thereon, while withholding from the refund any district use tax that might be due on the use of the fuel.

The passage of 1989 AB 2143 removed from the Controller, the authority to make such district use tax collections and sales tax refunds. Since most refunds of MVF tax result in a reduction of the measure of the sales tax (rather than the use tax) the Board is not authorized to make refunds of sales tax directly to the purchasers. Such purchasers should contact their vendors to claim their refund. 1/29/91.