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Section 6357.1 of the Revenue and Taxation Code allows a partial exemption from the state portion of sales and use tax on purchases of diesel fuel for use in qualified farming activities and food processing. If you have accepted partial exemption certificates for these diesel fuel sales and have paid the prepaid sales tax to your supplier, you may find you have overpaid the sales tax and are entitled to a refund.
If you regularly find yourself in this sales tax credit situation, you may want to take advantage of the following option:
Change of reporting basis to expedite credit return processing.
If you change your reporting basis from quarterly to monthly, your return processing will be expedited. The Board will be able to identify your overpayment faster and issue a refund sooner. For those reporting on a quarterly prepayment basis, this means you would no longer file monthly estimated prepayments but would complete your return in its entirety each month.
To qualify to change your reporting basis and expedite the processing of your credit return, you must:
- have substantial sales of diesel fuel for which partial exemption certificates have been accepted,
- have made prepayments of the sales tax to your supplier,
- report sales and use tax on a monthly basis,
- file returns that regularly have a credit balance, and
- specifically request to participate in this process.
We will assign a special code to your account to ensure you will receive the correct return and envelope for remitting your return for special handling. If you fail to use the designated return and envelope, your return will not be identified for expedited processing. Please be aware that computational errors and incomplete or missing schedules can delay processing of your return as well as delay any refund of amounts overpaid.
If you would like to change your reporting basis to monthly and expedite the processing of your credit returns, please contact your local Board office.
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