United States

California: State Board of Equalization no Longer Required to Approve Sales Tax Refunds over $100,000

Feb 15, 2016
From KPMG TaxWatch

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Historically, all California sales and use tax refunds, credits, or cancellations of tax exceeding $100,000 were required to be submitted to the State Board of Equalization for approval. Approval was also required for any request to cancel fraud or evasion penalties (regardless of the amount of the penalty). Last April, the Board voted to eliminate the Board approval requirement. This was to be accomplished by delegating final approval authority to Board staff for all refunds, credits, and cancellations regardless of dollar amount. Subsequent to the vote, the Board proposed amendments to certain California regulations that were necessary for the Board’s delegation of authority to become effective. On February 3, the proposed amendments were approved and filed with the Secretary of State. The amendments will take effect March 1, 2016.

Consistent with the Board’s vote, the amendments eliminate the requirement for Board approval of sales and use tax refund claims. Going forward, sales and use tax refunds, credits, and cancellations in excess of $100,000 will be submitted to a Deputy Director, as will requests to abate fraud or evasion penalties. The Deputy Director may approve the staff findings or make his or her own findings as to whether the claim should be granted or denied. This can be done without further documentation or testimony from the taxpayer. If the Deputy Director makes a determination that is less favorable than the staff recommendation, the taxpayer will be provided an opportunity to request an appeals conference or Board hearing. Please contact Chris Craft at 858-750-7301 with questions.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.