Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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410.0000 PERMITS—Regulation 1699

Annotation 410.0197

(a) IN GENERAL

410.0197 Predecessor and General Partner Liability. The addition of section 6071.1(a) and section 6487.2(b) to the Sales and Use Tax Law is not effective against tax liabilities which became "due and payable" within the meaning of section 6451 prior to January 1, 1994. Once the liabilities became "due and payable," the state had a "vested right" to taxes from a permit holder who transferred a business without notice to the Board. In Estate of Stanford (1899) 126 Cal. 112, the court held that the Legislature was barred from retroactively reducing taxes where the right to those taxes had vested in the state.

Accordingly, once the taxes became "due and payable," a predecessor, who transferred a business without notifying the Board, became liable for the tax pursuant to Regulation 1699. Subsequent legislation, which reduces the period over which the predecessor liability extends, is ineffective as to that liability.

Likewise, the section 6487.2 amendments which establish a statutory period in which a determination must be issued against a partner who has withdrawn from a partnership and limits the period of liability is not effective as to liabilities which became "due and payable" prior to January 1, 1994. 4/4/94.