Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales And Use Tax Law

CHAPTER 7. OVERPAYMENTS AND REFUNDS

Article 1. Claim for Refund

Section 6902

6902. Claim; limitation period. (a) (1) For persons required to file returns on other than an annual basis, except as provided in subdivision (b) no refund shall be approved by the board after three years from the last day of the month following the close of the quarterly period for which the overpayment was made, or, with respect to determinations made under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511) or Article 4 (commencing with Section 6536) of Chapter 5 of this part, after six months from the date the determinations become final, or after six months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the board within that period.

(2) For persons required to file returns on an annual basis, except as provided in subdivision (b) no refund shall be approved by the board after three years from the last day of the calendar month following the one-year period for which the overpayment was made, or with respect to determinations made under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), or Article 4 (commencing with Section 6536) of Chapter 5, after six months from the date the determinations become final, or after six months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the board within that period. No credit shall be approved by the board after the expiration of that period unless a claim for credit is filed with the board within that period, or unless the credit relates to a period for which a waiver is given pursuant to Section 6488.

(b) A refund may be approved by the board for any period for which a waiver is given under Section 6488 if a claim therefor is filed with the board before the expiration of the period agreed upon.

History.—Stats. 1945, p. 1002, operative July 1, 1945, substituted "six month" for "60 days," and added provision permitting allowance of credit relating to period for which a waiver is given. Stats. 1947, p. 1558, operative July 1, 1947, substituted "last day of the month following" for "fifteenth day after." Stats. 1949, p. 1342, operative July 1, 1949, reworded the first sentence to permit the board to approve a refund within the limitation period without a claim therefor being filed and substituted "approved by the board" for "allowed" in the last sentence. Stats. 1965, p. 4440, in effect September 17, 1965, revised first line, added "(a)" and "4" in first paragraph, and added (b). Stats. 1977, Ch. 921, operative January 1, 1978, limited paragraph (a) to other than annual basis taxpayers, added a new paragraph for annual basis taxpayers, and added code sections in references to Articles 2, 3, and 4 of Chapter 5. Stats. 1992, Ch. 902, in effect September 25, 1992, operative January 1, 1993, added "(1)" after "(a)", substituted "persons required to file" for "taxpayers filing", added "Article" before "3" and "4", and substituted "that" for "such" after "board within" in paragraph (1) of subdivision (a); added paragraph number (2) after subdivision (a), substituted "persons required" for "taxpayers filing", added "Article" before "3" and "4", deleted "of this part" after "Chapter 5", and substituted "that" for "such" twice after "board within" and after "expiration of" in paragraph (2) of subdivision (a).

Claim not timely.—Where (1) the board issued a notice of determination to a taxpayer that the amounts paid with its returns were less than the amounts due, (2) the taxpayer filed a petition for redetermination, and (3) the board ultimately concluded that the taxpayer had made overpayments with its returns rather than underpayments, the board's ultimate conclusion was not a determination made under Article 2 or 3 of Chapter 5 and hence a refund claim filed within six months of the board's action was not a claim for a refund with respect to a determination under Article 2 or 3 of Chapter 5. Holland Furnace Co. v. State Board of Equalization (1960) 177 Cal.App.2d 672.

No Refund of Voluntary Payment of Estimated Tax Liability.—Taxpayer sought a refund of amounts voluntarily paid to the Board of Equalization in advance payment of estimated tax liability. Taxpayer made the payments during an extension of time within which a notice of deficiency determination might be mailed to taxpayer. The extension period expired, however, before the Board actually issued a deficiency notice. Taxpayer contended that the Board could not retain the amounts paid because the deficiency notice was not issued within the statutory period of limitations. The court, in holding that taxpayer was not entitled to a refund, noted that the record showed that at the time the payment was made taxpayer's tax delinquency was in excess of the sum paid. The court observed that taxpayer's liability to pay the deficiency was a continuing liability and was not created by the issuance of the deficiency notice and that in issuing a deficiency determination the Board had merely determined that, after the payment in question, there still remained a balance due which taxpayer had failed to pay. The court pointed out that the Board had recognized the bar of the statute of limitations as to any amounts due over and above the amount paid. Owens-Corning Fiberglas Corp. v. State Board of Equalization (1974) 39 Cal.App.3d 532.

Suit by Consumer Against Retailer for Refund of Excess Tax Reimbursement.—The statute of limitations did not bar the refund of excess sales tax reimbursement to retailers where the California Supreme Court had previously held that the board was a proper party to a class action by a consumer against the retailers, since (1) the refunds were required under the doctrine of the law of the case, (2) the action was commenced before the statute of limitations expired and (3) timely claims by some of the retailers inured to the benefit of the entire class of defendant retailers. Javor v. State Board of Equalization (1977) 73 Cal.App.3d 939 [disapproved to the extent inconsistent with Woosley v. State of California (1992) 3 Cal.4th 758].

Purchaser Lacks Standing to Sue for Refund.—A purchaser may not bring an action against the State Board of Equalization seeking recovery of sales taxes which it assertedly overpaid to its vendors because the purchaser is not the taxpayer. State Board of Equalization v. Superior Court (Petroleum Contractors, Inc.) (1980) 111 Cal.App.3d 568.

Refund.—The court upheld the Board's position that a claim for recovery of a partial payment must be filed within six months of the date of such partial payment. Chahine v. State Board of Equalization (1990) 222 Cal.App.3d 485.