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Business Taxes Law Guide—Revision 2024

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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

35033 Persons Who May File a Claim for Refund; Limitations on Certain Claims
35034 Limitation Period for a Claim for Refund
35035 Failure to File a Timely Claim for Refund
35036 General Contents of a Claim for Refund
35037 Contents of a Claim for Refund Under Diesel Fuel Tax Law
35038 Additional Requirements for a Claim for Refund Filed Under the Cigarette and Tobacco Products Tax Law
35039 Filing a Claim for Refund
35040 Assignment and Acknowledgment of a Claim for Refund
35041 Request for Additional Documentary Evidence
35042 Action on a Claim for Refund
35043 Discretion to Grant or Deny an Appeals Conference on a Claim for Refund
35044 Credits and Offsets May Reduce a Refund
35045 Combined Claim for Refund on Behalf of Class of Taxpayers

California Department of Tax and Fee Administration

Chapter 1. Appeals

Article 3. Claims for Refund

35033. Persons Who May File a Claim for Refund; Limitations on Certain Claims.

Reference: Sections 6901, 6902, 8101, 8101.1, 8101.6, 8101.7, 8102, 8126, 8128, 9151, 9152, 30176, 30176.1, 30176.2, 30177, 30361, 30362, 38601, 38602, 40111, 40112, 41100, 41101, 43451, 43452, 45651, 45652, 46501, 46502, 50139, 50140, 55221, 55222, 60501, 60502, 60507, 60521 and 60522, Revenue and Taxation Code; Section 1537, Water Code.

(a) Any taxpayer who believes that it has overpaid tax, or interest or penalty thereon, or believes it has paid to CDTFA any other refundable amount, may file a claim for refund, subject to the limitations and conditions set forth in this regulation.

(b) Motor Vehicle Fuel Tax Law. A claim for refund based upon any of the following grounds must be filed with the Controller and is not governed by this chapter:

(1) The motor vehicle fuel was purchased and used for a purpose other than operating motor vehicles on public highways in California.

(2) The motor vehicle fuel was exported for use outside of California.

(3) The motor vehicle fuel was sold to the armed forces of the United States for use in ships or aircraft, or for use outside of California in a manner that would qualify for an exemption under Revenue and Taxation Code section 7401.

(4) The motor vehicle fuel was purchased for and used in construction equipment, which is exempt from vehicle registration under the Vehicle Code.

(5) The claimant is a supplier who sold motor vehicle fuel to a consulate office or consulate employee under circumstances that would have entitled the supplier to an exemption under Revenue and Taxation Code section 7401, subdivision (a)(4).

(6) The claimant is a supplier that:

(A) Removed motor vehicle fuel from a rack and paid tax on that removal, or purchased tax-paid motor vehicle fuel outside the bulk transfer/terminal system; and

(B) Delivered the tax-paid motor vehicle fuel to another approved terminal from which the supplier subsequently removed the tax-paid motor vehicle fuel at the terminal rack and paid a second tax on the same amount of motor vehicle fuel.

(7) The claimant is a supplier who purchased tax-paid motor vehicle fuel in the bulk transfer/terminal system and subsequently removed the tax-paid motor vehicle fuel at the terminal rack, and paid tax upon the same amount of motor vehicle fuel twice.

(8) The claimant provides public transportation services and used tax-paid motor vehicle fuel to propel passenger carrying vehicles used for the transportation of persons for hire, compensation, or profit.

(9) The claimant paid tax attributable to the distribution of motor vehicle fuel for use or used in propelling a vessel operated by its owner on waters located on private property owned or controlled by it.

(1) A claim for refund under Revenue and Taxation Code section 43452 will be acknowledged. However no determination will be made as to whether any substance is a hazardous or extremely hazardous waste. A claim for refund based solely on such grounds will be forwarded to the Director of Toxic Substances Control for determination in accordance with Revenue and Taxation Code section 43452, and will not be considered by CDTFA until after the Director of Toxic Substances Control has made his or her determination.

(2) Childhood Lead Poisoning Prevention Fee.

(A) A claim for refund of the Childhood Lead Poisoning Prevention Fee may be founded upon any grounds, including such grounds as:

1. The taxpayer’s industry did not contribute in any manner to environmental lead contamination;

2. The taxpayer’s lead or lead containing product does not currently or did not historically result in quantifiable persistent lead contamination; or

3. The amount of the fee assessed does not reflect the taxpayer’s market share or is incorrectly computed.

(B) A claim for refund based on any of the grounds set forth in subdivision (c)(2)(A) will not be acted upon until after the California Department of Public Health has acted upon the taxpayer’s application for exemption from the fee or reassessment of the fee. An application for exemption must be submitted to the California Department of Public Health in the manner provided in California Code of Regulations, title 17, section 33040. An application for reassessment must be submitted to the California Department of Public Health in the manner provided in California Code of Regulations, title 17, section 33050.

(d) Covered Electronic Waste Recycling Fee. All claims for refund of the Covered Electronic Waste Recycling Fee will be acknowledged. However, no determination will be made as to whether an item is or is not a covered electronic device. Claims for refund based upon such grounds will be forwarded to the California Department of Toxic Substances Control for determination in accordance with Public Resources Code section 42464.6.

(e) Water Rights Fee Law. A claim for refund filed under the Fee Collection Procedures Law that is based upon the assertion that the State Water Resources Control Board improperly or erroneously determined that a person or entity was required to pay a water rights fee or the amount of such fee will not be accepted. However, CDTFA will accept a claim for refund based upon such grounds if the determination referred to in the claim for refund has already been set aside by the State Water Resources Control Board or a court reviewing the determination. A determination by the State Water Resources Control Board regarding the amount of the water rights fee or that a person or entity is required to pay such fee is subject to review under chapter 4 of part 1 of division 2 of the Water Code.

(f) Lead-Acid Battery Recycling Fee. A claim for refund of the Lead-Acid Battery Recycling Fee will be acknowledged. However, no determination will be made as to whether an item is or is not a lead-acid battery. A claim for refund based upon such grounds will be forwarded to the California Department of Toxic Substances Control for determination in accordance with Health and Safety Code section 25215.45.

History—New article 3 (regulations 35033-35045) and regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Article and regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Article and 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 5230 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 40171, 41128, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35034. Limitation Period for a Claim for Refund.

Reference: Sections 6902, 6902.3, 6902.4, 6902.6, 8128, 8128.1, 9152, 9152.1, 9152.2, 9152.3, 30178, 30178.1, 30178.3, 30362, 30362.1, 30362.2, 38602, 38602.5, 40112, 40112.1, 40112.2, 40112.3, 41101, 41101.1, 41101.2, 41101.3, 43452, 43452.1, 43452.2, 43452.3, 45652, 45652.1, 45652.2, 45652.3, 46502, 46502.1, 46502.2, 46502.3, 50140, 50140.1, 50140.2, 50140.3, 55222, 55222.1, 55222.2, 55222.3, 60507, 60522, 60522.1, 60522.2 and 60522.3, Revenue and Taxation Code.

(a) A refund requested in a claim for refund cannot be approved unless the claim for refund is filed within the time periods provided in this regulation.

(b) Except as stated in this regulation, a claim for refund is timely if it is filed prior to the expiration of the last of the following time periods:

(1) Three years from the last day of the calendar month following the close of the reporting period for which the claimed overpayment was made;

(2) Six months from the date the determination became final, if the claimed overpayment was made under the notice of determination; or

(3) Six months from the date of the claimed overpayment.

(1) Stamps and Meter Register Settings. Instead of the period stated in subdivision (b)(1), a claim for refund of an overpayment made with regard to a purchase of stamps or meter register settings is timely if filed within three years from the due date for payment of the purchase for which the claimed overpayment was made.

(2) Other Claims for Refund. Instead of the period stated in subdivision (b)(1), a claim for refund filed under the Cigarette and Tobacco Products Tax Law other than a claim for refund of an overpayment made with regard to a purchase of stamps or meter register settings is timely if filed within three years from the 25th day after the close of the monthly period for which the claimed overpayment was made.

(3) Exported Tobacco Products. The periods stated in subdivisions (b) and (c)(1) and (2) do not apply to a claim for refund based upon the grounds that the tobacco products with respect to which the tax was paid were exported; a claim for refund based on such grounds is timely only if filed within three months after the close of the calendar month in which the export of the tobacco products is claimed to have occurred.

(d) Emergency Telephone Users Surcharge Law. Instead of the period stated in subdivision (b)(1), a claim for refund of an overpayment made under the Emergency Telephone Users Surcharge Law is timely if filed within three years after the last day of the second month following the close of the month for which the claimed overpayment was made.

(e) Hazardous Substances Tax Law, Fee Collection Procedures Law, Integrated Waste Management Fee Law, Underground Storage Tank Maintenance Fee Law, and Oil Spill Response, Prevention, and Administration Fees Law. Instead of the period stated in subdivision (b)(1), a claim for refund of an overpayment made under the Hazardous Substances Tax Law, Fee Collection Procedures Law, Integrated Waste Management Fee Law, Underground Storage Tank Maintenance Fee Law, and Oil Spill Response, Prevention, and Administration Fees Law is timely if filed within three years after the due date of the payment for the period for which the overpayment was made.

(f) Diesel Fuel Tax Law. Instead of the period stated in subdivision (b)(1), a claim for refund filed under Revenue and Taxation Code section 60501 (diesel fuel lost, sold, or removed) or 60502 (ultimate vendor claims) is timely if filed within three years from the date of the purchase of the diesel fuel to which the claim relates, or, if the tax was not invoiced at the time of the purchase of the diesel fuel, six months after the receipt of an invoice for the tax, whichever period expires later.

(g) Waivers. In addition to the periods stated above, except for a claim under the Emergency Telephone Users Surcharge Law or a claim described in subdivision (h), a claim for refund is also timely if filed for a reporting period covered by a waiver executed by the taxpayer and accepted by BTFD which extends the time for issuance by BTFD of a notice of determination to the taxpayer, provided the claim for refund is filed before the expiration of the period agreed upon in the waiver.

(h) Financially Disabled Individuals.

(1) The periods described in subdivisions (b), (c)(2), (d), and (e) are suspended during any period of an individual’s life that the individual is financially disabled.

(2) An individual is financially disabled if:

(A) The individual is unable to manage his or her financial affairs by reason of a medically determinable physical or mental impairment of the individual that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months; and

(B) Proof of the individual’s impairment is provided.

(3) An individual is not financially disabled during any period that the individual’s spouse or any other person is authorized to act on behalf of the individual in financial matters.

(4) This subdivision does not apply to a claim for refund of an overpayment made with respect to purchases of stamps or meter register settings filed under the Cigarette and Tobacco Products Tax Law.

(i) Levies and Liens. A claim for refund for an overpayment of tax collected by means of levy, through the use of liens, or by other enforcement procedures is timely if filed within three years of the overpayment, provided the tax was collected pursuant to one of the following laws: Sales and Use Tax Law, Use Fuel Tax Law, Energy Resources Surcharge Law, Emergency Telephone Users Surcharge Law, Hazardous Substances Tax Law, Integrated Waste Management Fee Law, Oil Spill Response, Prevention, and Administration Fees Law, Underground Storage Tank Maintenance Fee Law, Fee Collection Procedures Law, and Diesel Fuel Tax Law.

(j) A timely filed claim for refund for an overpayment made on a determination that is filed in the case in which the amount of tax determined has not been paid in full shall be deemed to be a timely filed claim for refund with respect to all subsequent payments applied to that determination provided that the determination was issued pursuant one of the following laws: Sales and Use Tax Law, Use Fuel Tax Law, Cigarette and Tobacco Products Tax Law, Energy Resources Surcharge Law, Emergency Telephone Users Surcharge Act, Hazardous Substances Tax Law, Integrated Waste Management Fee Law, Oil Spill Response, Prevention, and Administration Fees Law, Underground Storage Tank Maintenance Fee Law, Fee Collection Procedures Law, and Diesel Fuel Tax Law.

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. When the regulation was refiled September 17, 2018, subdivision (j) was added to the regulation’s text and references to Revenue and Taxation Code sections 6902.6, 9152.3, 30362.2, 40112.3, 41101.3, 43452.3, 45652.3, 46502.3, 50140.3, 55222.3, and 60522.3 were added to the regulation’s reference note. (The regulation incorporates provisions from regulation 5231 in division 2.1.)

35035. Failure to File a Timely Claim for Refund.

Reference: Sections 6905, 8128, 9152, 30178, 30178.1, 30364, 38604, 40114, 41103, 43453, 45653, 46504, 50141, 55223, 60507 and 60522, Revenue and Taxation Code.

A person’s failure to file a claim for refund within the applicable time period, as provided in regulation 35034, is a waiver of any demand against the State on account of the overpayment.

35036. General Contents of a Claim for Refund.

Reference: Sections 6904, 8129, 9153, 30176, 30176.1, 30176.2, 30177, 30363, 38603, 40113, 41102, 43452, 45652, 46503, 50140, 55222, 60501, 60502, 60505.5 and 60523, Revenue and Taxation Code.

(a) All Claims. A claim for refund must be in writing, must be signed by the claimant or the claimant’s authorized representative, and must include:

(1) The specific grounds or reasons upon which the claim is founded;

(2) The reporting period for which the claimed overpayment was made;

(3) The amount of the refund being claimed, if known; and

(4) Information necessary to contact the claimant or claimant’s authorized representative.

(b) Supporting Documentation. A claim for refund should be accompanied by whatever supporting written arguments and documentary evidence is necessary to verify and approve the claim. Failure to include such information along with a claim may delay its processing.

(c) Forms. The filing of a completed form provided by CDTFA for use as a claim for refund will satisfy the requirements of this regulation, other than subdivision (b).

(d) Returns and Payments. In no event may the claimant deduct amounts included in a claim for refund from the amount required to be reported and paid for any reporting period.

35037. Contents of a Claim for Refund Under Diesel Fuel Tax Law.

Reference: Sections 60501, 60502, 60505.5 and 60523, Revenue and Taxation Code.

Notwithstanding regulation 35036, a claim for refund of a payment made with respect to the Diesel Fuel Tax Law must be prepared and filed in the following manner:

(a) Diesel Fuel that is lost, sold, or removed.

(1) A claim for refund must satisfy the requirements of subdivision (a)(2) if it is based upon the grounds that:

(A) Tax was imposed on the diesel fuel to which the claim relates; and

(B) The claimant bought or produced the diesel fuel to which the claim relates and the same diesel fuel was:

1. Used for purposes other than operating motor vehicles upon the public highways of California;

2. Exported for use outside of California;

3. Used in construction equipment that is exempt from registration under the Vehicle Code;

4. Used in the operation of a motor vehicle on any highway that is under the jurisdiction of the United States Department of Agriculture;

5. Used in any motor vehicle owned by any county, city and county, city, district, or other political subdivision or public agency;

6. Sold by a supplier to any consulate office or consulate employee;

7. Lost in the ordinary course of handling, transportation, or storage;

8. Sold to the United States, its agencies, or instrumentalities;

9. Sold to a train operator for use in a diesel-powered train or other off-highway use;

10. Removed from an approved terminal at the terminal rack, but only to the extent that the supplier can show that the tax on the same amount of diesel fuel has been paid more than one time by the same supplier; or

11. Removed from an approved terminal at the terminal rack as part of dyed blended biodiesel fuel, where tax is not imposed on that removal and tax had been previously imposed on the biodiesel fuel portion of the dyed blended biodiesel fuel, but only to the extent a supplier can show that the tax on that biodiesel fuel has been paid by the same supplier.

(2) A claim for refund based upon the grounds described in subdivision (a)(1) must:

(A) Be prepared and filed on a form prescribed by CDTFA;

(B) Be accompanied by the original invoice showing the purchase, or, if no original invoice was created, an electronic invoice and the original bill of lading or fuel manifest;

(C) Include the name, address, telephone number, and permit number of the person that sold the diesel fuel to the claimant and the date of the purchase;

(D) Include a statement by the claimant indicating that the diesel fuel covered by the claim did not contain visible evidence of dye;

(E) Include a statement by the person who sold the diesel fuel to the claimant indicating that the diesel fuel did not contain visible evidence of dye;

(F) Identify the total amount of diesel fuel covered by the claim;

(G) Describe the use made of the diesel fuel; and

(H) Be accompanied by proof that the diesel fuel was exported, if the claim is based upon the grounds that the diesel fuel was exported.

(3) A claim for refund based upon the grounds provided for in subdivision (a)(1) must be filed on a calendar year basis, except that a claim for refund of more than $750 may be filed for a quarter of a calendar year.

(b) Ultimate Vendors of Diesel Fuel. A claim for refund based upon the grounds that the claimant was an ultimate vendor that sold tax-paid diesel fuel to an ultimate purchaser for use on a farm for farming purposes or for use in an exempt bus operation may not be filed for an amount of tax less than $200 or for a period shorter than one week and must:

(1) Be prepared and filed on a form prescribed by CDTFA;

(2) Contain the claimant’s permit number;

(3) Include the name, address, telephone number, and permit number of the person that sold the diesel fuel to the claimant and the date of the purchase;

(4) Include the name, address, telephone number, and federal taxpayer identification number of each farmer or the permit number of each exempt bus operator that bought the diesel fuel from the claimant and the number of gallons of diesel fuel the claimant sold to each;

(5) Include the claimant’s statement that the diesel fuel covered by the claim did not contain evidence of visible dye;

(6) Identify the total amount of diesel fuel covered by the claim;

(7) Include the claimant’s statement that it has an unexpired exemption certificate described in Revenue and Taxation Code section 60503 and has no reason to believe the certificate is false; and

(8) Include the claimant’s statement that the amounts claimed have not been previously refunded to the claimant.

(c) Other Claims. A claim for refund under the Diesel Fuel Tax Law not described in subdivision (a) or (b) may be filed in the manner provided for in regulation 35036.

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 60601, Revenue and Taxation Code.

35038. Additional Requirements for a Claim for Refund Filed Under the Cigarette and Tobacco Products Tax Law.

Reference: Sections 30176, 30176.1, 30176.2, 30177 and 30363, Revenue and Taxation Code.

In addition to the requirements of regulation 35036, a claim for refund of amounts paid with regard to purchases of stamps or meter register settings must satisfy the requirements of and be prepared and filed on any form required by regulations 4061 through 4065.

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 30451, Revenue and Taxation Code.

35039. Filing a Claim for Refund.

Reference: Sections 6902, 8128, 9152, 30178, 30178.1, 30362, 38602, 40112, 41101, 43452, 45652, 46502, 50140, 55222, 60501, 60502, 60507 and 60522, Revenue and Taxation Code.

(a) A claim for refund and related documents filed under any tax law administered by CDTFA other than the Sales and Use Tax Law may be filed as specified in subdivision (c) of regulation 35015 for the filing of a petition for redetermination.

(b) Except as provided in subdivision (c), a claim for refund and related documents under the Sales and Use Tax Law may be filed as set forth in this subdivision, or as otherwise expressly provided on CDTFA's website at www.cdtfa.ca.gov.

(1) Hand delivery: Audit Determination and Refund Section, MIC 39, California Department of Tax and Fee Administration, 450 N Street, Sacramento, CA 95814.

(2) Mailing address: Audit Determination and Refund Section, MIC 39, California Department of Tax and Fee Administration P.O. Box 942879 Sacramento, CA 94279-0039.

(3) Email address: BTFD-ADRS@cdtfa.ca.gov.

(4) Facsimile number: (916) 445-2202.

(c) A claim for refund of tax paid to the Department of Motor Vehicles and related documents may be filed as set forth in this subdivision, or as otherwise expressly provided on CDTFA's website at www.cdtfa.ca.gov.

(1) Hand delivery: Consumer Use Tax Section, MIC 37, California Department of Tax and Fee Administration, 450 N Street, Sacramento, CA 95814.

(2) Mailing address: Consumer Use Tax Section, MIC 37, California Department of Tax and Fee Administration P.O. Box 942879 Sacramento, CA 94279-0037.

(3) Email address: BTFD-ADRS@cdtfa.ca.gov.

(4) Facsimile number: (916) 324-2491.

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. When the regulation was refiled September 17, 2018, the first sentence was reformatted as subdivision (a); the second sentence was reformatted as subdivision (b); subdivisions (a) through (d) were renumbered as subdivision (b)(1) through (4); "A" was replaced with "Except as provided in subdivision (c), a" at the beginning of and "regulation" was replaced with "subdivision" in the middle of reformatted subdivision (b); "BTFD-" was added to the beginning of "ADRS@cdtfa.ca.gov" in renumbered subdivision (b)(3); and new subdivision (c) was added. (The regulation incorporates provisions from regulation 5233 in division 2.1.)

35040. Assignment and Acknowledgment of a Claim for Refund.

Reference: Sections 6901, 6902, 8126, 8128, 9151, 9152, 30176, 30176.1, 30176.2, 30177, 30178, 30178.1, 30361, 30362, 38601, 38602, 40111, 40112, 41100, 41101, 43451, 43452, 45651, 45652, 46501, 46502, 50139, 50140, 55221, 55222, 60501, 60502, 60507, 60521 and 60522, Revenue and Taxation Code.

After receipt of a claim for refund, the assigned section will promptly mail the claimant a letter acknowledging receipt of the claim for refund and the contact information for the applicable staff within the assigned section.

35041. Request for Additional Documentary Evidence

Reference: Sections 6901, 6902, 6906, 8126, 8128, 9151, 9152, 30176, 30176.1, 30176.2, 30177, 30178, 30178.1, 30361, 30362, 30365, 38601, 38602, 38605, 40111, 40112, 40115, 41100, 41101, 41104, 43451, 43452, 43454, 45651, 45652, 45654, 46501, 46502, 46505, 50139, 50140, 50142, 55221, 55222, 55224, 60501, 60502, 60506, 60507, 60521 and 60522, Revenue and Taxation Code.

Where the assigned section believes additional documentary evidence is needed for it to be able to verify and approve a claim, it will contact the claimant and request such information. The failure to provide such information upon request may result in the assigned section’s conclusion that the claim should be denied.

35042. Action on a Claim for Refund.

Reference: Sections 6901, 6902, 6906, 6933, 8126, 8128, 8148, 9151, 9152, 9173, 30176, 30176.1, 30176.2, 30177, 30178, 30178.1, 30361, 30362, 30365, 30403, 38601, 38602, 38605, 38613, 40111, 40112, 40115, 40127, 41100, 41101, 41104, 41110, 43451, 43452, 43454, 43473, 45651, 45652, 45654, 45703, 46501, 46502, 46505, 46523, 50139, 50140, 50142, 50145, 55221, 55222, 55224, 55243, 60501, 60502, 60507, 60521, 60522 and 60543, Revenue and Taxation Code.

(a) The assigned section must review the claim for refund and all other relevant information available to it in reaching findings on behalf of BTFD, subject to the oversight of the Deputy Director.

(b) If the assigned section finds that a claim should be granted in its entirety, subject to subdivision (d), it will:

(1) Mail the taxpayer a notice of refund showing the amount to be refunded; and

(2) Have a refund warrant prepared and sent to the taxpayer after determining if such amounts should be credited or offset against other liabilities as provided in regulation 35044.

(c) If the assigned section finds that a claim for refund should be denied, in whole or in part, it will mail the taxpayer a letter containing its findings and an explanation of those findings. The letter will also advise that the taxpayer’s claim for refund will be resolved in accordance with the assigned section’s findings unless, within 30 days of the date of the letter, the taxpayer submits to the assigned section a written request for an appeals conference.

(1) If the taxpayer submits a written request for an appeals conference within 30 days of the date of the letter and the request is not denied under regulation 35043, the assigned section will prepare a summary analysis which sets forth the taxpayer’s contentions and the reasons BTFD has found that the claim for refund should be denied, in whole or in part. The assigned section will then mail a copy of the summary analysis to the taxpayer and will forward the appeal to the Appeals Bureau for the scheduling of an appeals conference in accordance with article 8 of this chapter.

(2) If the taxpayer does not submit a written request for an appeals conference within 30 days of the date of the letter or if such a request is submitted but denied under regulation 35043, the assigned section will mail the taxpayer a notice of denial of claim for refund denying the claim in whole or in part, as applicable. Where the findings of the assigned section are to grant the claim in part, subject to subdivision (d), it will:

(A) Mail the taxpayer a notice of refund showing the amount to be refunded; and

(B) Have a refund warrant prepared and sent to the taxpayer after determining if such amounts should be credited or offset against other liabilities as provided in regulation 35044.

(d) If the assigned section finds that a refund in excess of $50,000 should be granted, the proposed finding must be available as a public record, if required by law, for at least 10 days prior to its effective date.

(e) Failure of the taxpayer to commence a court action within 90 days after the mailing of the notice of CDTFA’s Action on a Claim for Refund 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.

35043. Discretion to Grant or Deny an Appeals Conference on a Claim for Refund.

A request for an appeals conference conducted under article 8 of this chapter may be denied on a claim for refund. Requests will be liberally granted, except that a taxpayer’s request for an appeals conference will generally be denied where the taxpayer had already been provided with an appeals conference on the same issue, and has not submitted any additional arguments or evidence.

35044. Credits and Offsets May Reduce a Refund.

Reference: Sections 6483, 6512, 6901, 8126, 8778, 8802, 9151, 30176, 30176.1, 30176.2, 30177, 30203, 30222, 30361, 38413, 38422, 38601, 40073, 40082, 40111, 41072, 41081, 41100, 43201, 43451, 45201, 45651, 46201, 46252, 46501, 50113, 50139, 55061, 55221, 60508, 60508.3 and 60521, Revenue and Taxation Code.

(a) The amount shown as a refund on a notice of refund is the amount due to the claimant. However, that amount will not be paid directly to the claimant if it is subject to being credited or offset against other amounts owed by the claimant, which are then due and payable to CDTFA or to any other state agency with whom CDTFA has a memorandum of understanding for such purpose.

(b) Any portion of a claimant’s refund remaining after the refund has been credited or offset against other amounts that are then due and payable from the claimant will be refunded and paid to the claimant.

(c) Diesel Fuel Tax Law. Credits claimed on a return in lieu of claiming a refund under Revenue and Taxation Code sections 60501 and 60502 are not subject to subdivision (a).

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.

(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.

(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.

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

Laws, Regulations and Annotations

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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

California Department of Tax and Fee Administration

Chapter 1. Appeals

Article 3. Claims for Refund

35033. Persons Who May File a Claim for Refund; Limitations on Certain Claims.

35034. Limitation Period for a Claim for Refund.

35035. Failure to File a Timely Claim for Refund.

35036. General Contents of a Claim for Refund.

35037. Contents of a Claim for Refund Under Diesel Fuel Tax Law.

35038. Additional Requirements for a Claim for Refund Filed Under the Cigarette and Tobacco Products Tax Law.

35039. Filing a Claim for Refund.

35040. Assignment and Acknowledgment of a Claim for Refund.

35041. Request for Additional Documentary Evidence

35042. Action on a Claim for Refund.

35043. Discretion to Grant or Deny an Appeals Conference on a Claim for Refund.

35044. Credits and Offsets May Reduce a Refund.

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

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