California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 18 - Administration-Miscellaneous › Section 1703 - Interest and Penalties

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Statutory Provisions. Interest and penalties are prescribed in various sections
				  of the Sales and Use Tax Law as follows:
Subject
Sections
							 Interest
Penalties
Failure to pay tax within required time (except
							 determinations)
6480.4, 6591
6476, 6477, 6478, 6479.3, 6480.4,
							 6591, 7051.2
Failure to file a timely return Deficiency
							 determinations
6482
6479.3, 6591 6484 (negligence), 6485
							 (fraud), 7051.2
Determinations--Sales tax reimbursement or use tax
							 collected but not timely remitted
6597
Determination--failure to make
							 return
6513
6511, 6514 (fraud), 7051.2
Jeopardy determinations
6537
6537,
							 7051.2
Extensions of time
6459
Determinations--Nonpayment of
							 Offsets
6512
6565, 7051.2 6512
Refunds and credits
6901, 6907,
							 6908
6901
Suits for refund
6936
Disposition of interest and
							 penalties
7101
7101
Criminal Penalties
6073, 6094.5,
							 6422.1, 7152, 7153, 7153.5, 7153.6
Failure to make timely application for registration
							 of motor vehicle, mobilehome, aircraft or undocumented
							 vessel
6291-6294
6291-6294
Registration of vehicle, vessel or aircraft out of
							 state
6485.1, 6514.1 (intent to evade)
Advertising that use tax will be absorbed
6207
Any violation of Sales and Use Tax Law
7153, 7153.5
Failure to collect use tax
6207
Failure to display use tax separately
6207
Failure to furnish return or other data
6452, 6455
Improper use of resale
							 certificates
6072
6072, 6094.5
Making false return
7152
Misuse of vehicle use tax exemption
							 certificates
6422.1
Operating as seller without permit
6071, 6077
Failure to obtain valid permit
6077, 7155
Relief from interest or penalty
6593,
							 6596
6592, 6596
Modified adjusted daily rate
6591.6
Modified adjusted rate
6591.5
Failure to obtain evidence that operator of catering
							 truck holds valid permit
6074
Improper allocation of local tax by direct payment
							 permitholder
7051.2
Managed Audit program
7076.4
Failure to pay tax due to an error or delay by an
							 employee of the Board or Department of Motor Vehicles
6593.5
Erroneous refund
6964
Tax Amnesty Program (Reporting Periods Beginning
							 Before January 1, 2003)
7073, 7074
(b)
				  Interest.
(1) Interest Rates.
(A) In General. Interest is computed at the
				  modified adjusted rate per month, or fraction thereof. "Modified adjusted rate
				  per month, or fraction thereof" means the modified adjusted rate per annum
				  divided by 12.
(B) Underpayments.
				  "Modified adjusted rate per annum" for underpayments of tax is the rate for
				  underpayments determined in accordance with the provisions of section
				  6621 of the Internal Revenue Code
				  plus three percentage points. Such rate is subject to semiannual modification
				  pursuant to the provisions of subparagraph (c) of section
				  6591.5
				  of the Revenue and Taxation Code.
(C) Overpayments. Except as provided below,
				  "modified adjusted rate per annum" for overpayments of tax is the bond
				  equivalent rate of 13-week treasury bills auctioned, rounded to the nearest
				  full percent (or to the next highest full percent if .50%), subject to
				  semiannual modification pursuant to the provisions of subparagraph (d) of
				  section
				  6591.5
				  of the Revenue and Taxation Code. For the period July 1, 1991, through June 30,
				  1992, the modified adjusted rate per annum for overpayments is equal to the
				  bond equivalent rate of 13-week treasury bills auctioned on July 1, 1991,
				  rounded to the nearest full percent (or to the next highest full percent if
				  .50%).
(D) Managed Audit Program.
				  Upon completion of the managed audit and verification by the Board, interest
				  shall be computed at one-half the rate that would otherwise be imposed for
				  liabilities covered by the audit period.
(E) Error or Delay by Employee of Board or
				  Department of Motor Vehicles. For tax liabilities that arise during taxable
				  periods commencing on or after July 1, 1999, this subdivision is limited to
				  interest imposed by sections
				  6480.4,
				  6513,
				  6591,
				  and
				  6592.5
				  of the Revenue and Taxation Code. Effective January 1, 2002, this subdivision
				  applies to interest imposed by any provision of the Sales and Use Tax Law. All
				  or any part of such interest imposed may be relieved by the Board, in its
				  discretion, under either of 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.
For the purposes of this subdivision, 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.
Any person seeking relief under this subdivision 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 which the Board
					 may require.
(F)
				  Erroneous Refund. Operative for any action for recovery under Revenue and
				  Taxation Code section
				  6961
				  on or after July 1, 1999, no interest shall be imposed on the amount of an
				  erroneous refund by the Board until 30 days after the date on which the Board
				  mails a notice of determination for repayment of the erroneous refund if the
				  Board finds that neither the person liable for payment of tax nor any party
				  related to that person had in any way caused an erroneous refund for which an
				  action for recovery is provided under section
				  6961
				  of the Revenue and Taxation Code. The act of filing a claim for refund shall
				  not be considered as causing the erroneous refund.