Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2015
Sales and Use Tax Annotations
465.0000 REMEDIES OF TAXPAYERS
465.0056 Offsets to Refunds—"Due and Payable." Some taxpayers who have made overpayments of sales or use tax object to the delay in issuing a refund, while nonfinal items representing underpayments are being considered. They oppose the offset of the overpayment against the nonfinal underpayment on the grounds that section 6901 says overpayments shall be offset against "amounts then due and payable," and allege that nonfinal items are not due and payable. They rely on the fact that determinations are "due and payable" when they become final.
The language governing the meaning of due and payable is in section 6451, which states, "The taxes imposed by this part are due and payable to the Board quarterly on or before the last day of the month next succeeding each quarterly period." Therefore, sales and use taxes are due and payable when they are required to be reported, and if, upon audit, an underpayment of reported amounts is discovered and an assessment is made, the amount of the tax assessed was due and payable on the due date of the return on which the tax should have been reported. That is why interest begins to accrue on the due date of that return.
Even when there is a petition for redetermination, when the determination becomes final and thus due and payable under section 6565, the interest is nevertheless calculated from the date the tax was due and payable under section 6451. The use of the term "due and payable" in the context of a determination means that, until it is final, efforts to collect funds in the hands of the taxpayer or third parties on behalf of the taxpayer are stayed. Although collection action has been stayed, the Board has determined that there is an underpayment and there has been no administrative decision overturning that determination. Section 6483 contemplates the use of offsets on both notice of determination which have been issued as well as any unpaid self assessed taxes. 8/25/94.