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Business Taxes Law Guide – Revision 2024
 

California Department of Tax and Fee Administration

Title 18. Public Revenues
Division 5. California Department of Tax and Fee Administration

Chapter 1. Appeals

Article 3. Claims for Refund

Rule 35045

35045. Combined Claim for Refund on Behalf of Class of Taxpayers.

Reference: Sections 6904, and 6933, Revenue and Taxation Code.

(a) Where a person files a claim for refund of sales or use tax, including State-administered local sales, transactions, and use taxes, as a representative of a class of claimants, the representative must establish:

(1) It is more beneficial to the class and to the State to proceed as a combined claim for refund rather than individually.

(2) The existence and the composition of the class, including:

(A) A description of the members sufficient to identify the persons making up the class.

(B) The number of persons in the class.

(C) The manner in which and the time when the class members will be notified of the pendency of the combined claim.

(3) The issues of law and fact that are or are not common to all class members, and the approximate number of class members affected by each issue that is not common to all.

(4) The representative’s written authority to act as representative for each class member, which authority must authorize CDTFA to release to the representative any confidential information in CDTFA’s files that may be required in connection with the claim. This statement may include a separate claim for refund by the class member or may state that the class member joins in the combined claim.

(5) The representative is a member of the class and when and how the representative became a member. In addition, any unique legal or factual issues pertaining to the representative’s claim and any differences between the representative’s status as a class member and that of any other class member must be described.

(6) The representative can fairly and adequately protect the interests of each member of the class and the representative’s interests are not antagonistic to members of the class.

(7) When requested by CDTFA staff, that each member of the class has been notified of the pendency of the claim and each member has had a reasonable opportunity to join in or be excluded from the combined claim.

(b) Action to be taken by assigned section.

(1) If the assigned section finds that the claim is a proper combined claim it will, to the extent possible, act upon the claim in the same manner that it would act on any other claim. If the assigned section finds that the claim is not a proper combined claim, it will act only on claims by individual members and notify the representative that the claim is not valid as to others. In determining the amount of any refund due to any member of the class, the refund is limited to the amount of tax overpayment by that member under the tax law under which the claim was filed.

(2) Before a refund will be made to any member of the class, the amount of the tax overpayment by the member must be established and the representative or member must furnish or make available to CDTFA staff all contracts, documents, or records (or copies thereof) necessary to verify the overpayment and the amount thereof. If such contracts, documents, or records are not presented to or made available to CDTFA staff, the representative or member will be deemed to have failed to exhaust the administrative remedies.

(c) Effect of action on combined claims.

(1) Failure to commence a court action within 90 days after the mailing of the notice of CDTFA’s action on a refund claim as provided in the tax law under which the claim was filed constitutes a waiver of any demand against the state on account of alleged overpayments. This waiver, however, does not apply to persons who have not previously been notified of the claim, or who have notified CDTFA that they desire to be excluded from the combined claim. Nor does the waiver apply to persons involved in a claim to the extent it has been declared invalid as distinguished from persons as to whom a claim has been denied.

(2) A judgment in any court action filed with respect to the denial of any claim is res judicata as to the claimant’s tax liability or overpayments for the period involved.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5239 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Sections 7051, 7202, 7203, 7261 and 7262, Revenue and Taxation Code.