California Senate Bill SB1110 Latest Draft

 BILL NUMBER: SB 1110AMENDED BILL TEXT AMENDED IN SENATE APRIL 8, 2010 INTRODUCED BY Senator Runner FEBRUARY 17, 2010  An act to amend Section 6593.5 to the Revenue and Taxation Code, relating to taxation.   An act to amend Sections 6225, 6451, 6459, and 6592 of, and to add Sectio   ns 6225.1 and 6225.2 to, the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately.  LEGISLATIVE COUNSEL'S DIGEST SB 1110, as amended, Runner. Sales and use  tax: State Board of Equalization: administration: interest.   taxes: use tax administration.   The Sales and Use Tax Law imposes a tax on the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property. In order to facilitate the collection of the use tax, a qualified purchaser, as defined, is required to register with the State Board of Equalization and to report and pay by April 15 the use tax owed for the previous calendar year, as provided.   This bill would instead require a purchaser that is subject to the tax imposed by the Personal Income Tax Law to file a return for use tax by April 15, following the close of the calendar year, and to file a return made on the basis of a fiscal year by the 15th day of the 4th month following the close of the fiscal year. The bill would require a purchaser that is subject to the tax imposed by the Corporation Tax Law to file a return for use tax by March 15, following the close of the calendar year, and to file a return filed on the basis of the fiscal year by the 15th day of the 3rd month following the close of the fiscal year. The bill would authorize the board to grant a reasonable extension of time for filing a return under those provisions, as specified, and would delay the imposition of any authorized penalties for taxpayers subject to those requirements until on or after March 16, 2011. The bill would declare that its provisions and retroactive application serve a public purpose, as specified.   This bill would declare that it is to take effect immediately as an urgency statute.   The Sales and Use Tax Law requires the payment of interest at a specified rate on a failure to timely pay taxes, specified prepayments, and amounts collected as tax under that law, from the date on which those amounts became due and payable to the state until the date of payment. That law authorizes the State Board of Equalization, in its discretion, to relieve all or any part of interest imposed under specified circumstances.   This bill would make a technical, nonsubstantive change to that authorization provision.  Vote:  majority   2/3  . Appropriation: no. Fiscal committee:  no   yes  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 6225 of the   Revenue and Taxation Code   is amended to read:  6225. (a) In order to facilitate the collection of use tax imposed by this part, a qualified purchaser shall register with the board on a form prescribed by the board and shall set forth the name under which the qualified purchaser transacts or intends to transact business, the location of the qualified purchaser's place or places of business, and other information  as   that  the board may require. (b) Article 1 (commencing with Section 6451) of Chapter 5 of this part shall apply to a qualified purchaser, except that a return showing the total sales price of the tangible personal property purchased by the qualified purchaser, the storage, use, or other consumption of which became subject to the use tax during the preceding calendar year, and which was not paid to a retailer required to collect the tax or which was not paid to a retailer the qualified purchaser reasonably believed was required to collect the tax, shall be filed, together with a remittance of the amount of the tax due, with the board  on or before April 15   in accordance with paragraphs (1) and (2)  .  (1) For a purchaser subject to the tax imposed by Part 10 (commencing with Section 17001), a return filed pursuant to this section on the basis of the calendar year shall be filed on or before April 15, following the close of the calendar year. A return made on the basis of a fiscal year shall be filed on or before the 15th day of the fourth month following the close of the fiscal year.  (2) For a purchaser subject to the tax imposed by Part 11 (commencing with Section 23001), a return filed pursuant to this section on the basis of the calendar year shall be filed on or before March 15, following the close of the calendar year. A return made on the basis of the fiscal year shall be filed on or before the 15th day of the third month following the close of the fiscal year.  (c) A "qualified purchaser" means a person that meets all of the following conditions: (1) The person is not required to hold a seller's permit pursuant to this part. (2) The person is not required to be registered pursuant to Section 6226. (3) The person is not a holder of a use tax direct payment permit as described in Section 7051.3. (4) The person receives at least one hundred thousand dollars ($100,000) in gross receipts from business operations per calendar year. (5) The person is not otherwise registered with the board to report use tax. (d) This section shall not apply to the purchase of a vehicle, vessel, or aircraft as defined in Article 1 (commencing with Section 6271) of Chapter 3.5 of this part.  SEC. 2.   Section 6225.1 is added to the   Revenue and Taxation Code   , to read:   6225.1. (a) For purposes of administering Section 6225, the board may grant a reasonable extension of time for filing a return in the manner and form it determines. Except for a taxpayer residing or traveling abroad, an extension of time shall not be granted for more than six months. For a taxpayer residing or traveling abroad, a return shall be filed no later than the 15th day of the sixth month following the close of the taxable year, unless the requirements for an extension have been fulfilled on or before that date. (b) An extension of time granted pursuant to this section is not an extension of time for payment of the tax required to be paid on or before the due date of the return without regard to extension. Penalties shall be imposed, as provided by law, without regard to any extension granted under this section. (c) A reasonable extension for payment of tax required by Section 6225 may be granted by the board whenever in its judgment good cause exists.   SEC. 3.   Section 6225.2 is added to the   Revenue and Taxation Code   , to read:   6225.2. Any penalties authorized to be imposed under this part for any period for which taxpayers are subject to the registration and filing requirements of Section 6225 shall not be imposed until on or after March 16, 2011.   SEC. 4.   Section 6451 of the   Revenue and Taxation Code   is amended to read:  6451. The   Except as provided in Sections 6225 and 6225.1, 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.  SEC. 5.   Section 6459 of the   Revenue and Taxation Code   is amended to read:  6459. (a)  The   Except as provided in Section 6225, the  board for good cause may extend for not to exceed one month the time for making any return or paying any amount required to be paid under this part. The extension may be granted at any time provided a request therefor is filed with the board within or prior to the period for which the extension may be granted. Any person to whom an extension is granted shall pay, in addition to the tax, interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax would have been due without the extension until the date of payment. (b) The board may grant an extension for more than one month if both of the following conditions occur: (1) A budget for the state has not been adopted by July 1. (2) The person requesting the extension is a creditor of the state who has not been paid because of the state's failure to timely adopt a budget. Any extension granted under this subdivision shall expire no later than the last day of the month following the month in which the budget is adopted or one month from the due date of the return or payment, whichever comes later. Any person to whom an extension has been granted under this subdivision shall pay, in addition to the tax, interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax would have been due without the extension until the date of payment. However, no interest shall be due on that portion of the payment equivalent to the amount due to the person from the state on the due date of the payment.  SEC. 6.   Section 6592 of the   Revenue and Taxation Code   is amended to read:  6592. (a)  If   Except as provided in Section 6225.2, if  the board finds that a person's failure to make a timely return or payment is due to reasonable cause and circumstances beyond the person's control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person shall be relieved of the penalties provided by Sections 6476, 6477, 6479.3, 6480.4, 6480.8, 6511, 6565, 6591, 7051.2, 7073, and 7074. (b) Except as provided in subdivision (c) any person seeking to be relieved of the penalty shall file with the board a statement under penalty of perjury setting forth the facts upon which he or she bases his or her claim for relief. (c) The board shall establish criteria that provides for efficient resolution of requests for relief pursuant to this section.  SEC. 7.  The Legislature finds and declares that this act and its retroactive application are necessary to serve a public purpose by ensuring the fair and equitable treatment of taxpayers.   SEC. 8.   This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:   In order to address problems relating to administration and collection of the use tax and to prevent undue hardship to taxpayers, it is necessary that this act take effect immediately.   SECTION 1.   Section 6593.5 of the Revenue and Taxation Code is amended to read: 6593.5. (a) The board, in its discretion, may relieve all or any part of the interest imposed on a person by this part under the following circumstances: (1) Where the failure to pay tax is due in whole or in part to an unreasonable error or delay by an employee of the board acting in his or her official capacity. (2) Where failure to pay use tax on a vehicle or vessel registered with the Department of Motor Vehicles was the direct result of an error by the Department of Motor Vehicles in calculating the use tax. (b) For purposes of this section, an error or delay shall be deemed to have occurred only if no significant aspect of the error or delay is attributable to an act of, or a failure to act by, the taxpayer. (c) Any person seeking relief under this section shall file with the board a statement under penalty of perjury setting forth the facts on which the claim for relief is based and any other information that the board may require. (d) The board may grant relief only for interest imposed on tax liabilities that arise during taxable periods commencing on or after July 1, 1999.