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Business Taxes Law Guide—Revision 2024

BTLG Table of Contents > Alcoholic Beverage Tax Law > Chapter 6 > entire chapter

Alcoholic Beverage Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 14. Alcoholic Beverage Tax
Chapter 6. Determinations

Article 1. Returns and Payments

Article 1.1. Payment by Electronic Funds Transfer

Article 2. Deficiency Determinations

Article 3. Determinations If No Return Made

Article 4. Redeterminations

Article 5. Jeopardy Determinations

Article 1. Returns and Payments.

32251. Due date; contents of return. The tax is a direct obligation of the taxpayer and is due and payable monthly on or before the 15th day of each calendar month. Each taxpayer, on or before the 15th day of each month, shall file a tax return for the preceding calendar month, using electronic media, showing the amount of beer or wine or distilled spirits sold in this state, the amount of tax for the period covered by the return, and any other information as the board deems necessary. The taxpayer shall deliver the return, together with a remittance of the amount of tax due, to the office of the board on or before the 15th day of the month. Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the board.

History—Added by Stats. 1955, ch. 1842. Amended by Stats. 2002, ch. 459 (AB 1936), effective January 1, 2003, substituted "15th" for "fifteenth" after "before the" in the first, second and third sentences, substituted "in the form … electronic media" for "in such a form as is prescribed by the board," after "calendar month" substituted "state" for "State" in the second sentence, and added the fourth sentence. Amended by Stats. 2022, ch. 702 (SB 518), effective January 1, 2023, substituted "file" for "make out" after "each month, shall" and substituted "using" for "in the form … limited to," after "preceding calendar month," in the second sentence.

32251.5. Quarterly or annual returns. The board, if it deems it necessary in order to facilitate the collection of the amount of taxes, may require returns and payment of the amount of taxes for quarterly or annual periods depending on the principal place of business of the taxpayer, the amount of business done by the taxpayer, or the amount of taxes normally paid or payable by the taxpayer.

History—Added by Stats. 1975, Ch. 1186, in effect January 1, 1976. Stats. 1995, Ch. 555, in effect January 1, 1996, deleted "Whenever the returns filed by a taxpayer report tax liabilities that average less than one hundred dollars ($100) per month," at the beginning of the section.

32252. Interest and penalties. (a) Any taxpayer who fails to pay any tax to the state or any amount of tax required to be collected and paid to the state, except amounts of determinations made by the board under Article 2 (commencing with Section 32271) or Article 3 (commencing with Section 32291), within the time required shall pay a penalty of 10 percent of the amount of the tax, together with interest on that tax at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax became due and payable until the date of payment.

(b) Any person who fails to file a return in accordance with the due dates set forth in Sections 32251, or the due date established by the board in accordance with Section 32251.5 shall pay a penalty of fifty dollars ($50).

(c) The penalties imposed by this section shall be limited to either the fifty dollars ($50) provided in subdivision (b), or 10 percent of the tax provided in subdivision (a), whichever is greater.

History—Stats. 1992, Ch. 1336, in effect January 1, 1993, substituted "10" for "5" after "a penalty of". Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001, substituted former sole paragraph which stated "If the tax is not paid to the board within the time prescribed for the payment of the tax, a penalty of 10 percent of the amount of the tax shall be added thereto on account of the delinquency" for subdivisions (a), (b), and (c).

32252.5. Interest; daily basis. [Repealed by Stats. 2016, Ch. 264 (AB 2201), in effect January 1, 2017.]

32252.5. Interest; daily basis. (a) If the department finds, taking into account all facts and circumstances, that it is inequitable to compute interest at the modified adjusted rate per month or fraction thereof, as defined in subdivision (b) of Section 6591.5, interest shall be computed at the modified adjusted daily rate from the date on which the tax was due until the date of payment, if all of the following occur:

(1) The payment of tax was made one business day after the date the tax was due.

(2) The person was granted relief from all penalties that applied to that payment of tax.

(3) The person files a request for an adjustment.

(b) For purposes of this section, "modified adjusted daily rate" means the modified adjusted rate per annum as defined in subdivision (a) of Section 6591.5 determined on a daily basis by dividing the modified adjusted rate per annum by 365.

(c) For purposes of this section, "business day" means any day other than a Saturday, Sunday, or any day designated as a state holiday.

(d) This section shall not apply to any payment made pursuant to a deficiency determination, a determination where no return has been filed, or a jeopardy determination issued by the department.

(e) This section shall only apply to electronic payments of taxes.

History—Added by Stats. 2016, Ch. 264 (AB 2201), in effect January 1, 2017. Stats. 2021, Ch. 432 (SB 824), effective January 1, 2022, substituted "department" for "board" throughout; substituted "adjustment" for "oral hearing before the board" after "request for an" in paragraph (a)(3); deleted subdivision (c); and relettered former subdivisions (d), (e), and (f) as subdivisions (c), (d), and (e), respectively.

Note.—SEC. 1. of Stats. 2010, Ch. 316 (SB 1028), in effect January 1, 2011, states: "It is the intent of the Legislature that California's penalty and interest provisions foster and maintain the current high level of compliance, provide appropriate costs and sanctions for noncompliance, and provide a reasonable and administrable degree of latitude for individual taxpayer circumstances and errors. It is the intent of the Legislature in enacting this act, that the State Board of Equalization strictly and narrowly apply its provisions on a case-by-case basis and only in special circumstances."

32253. Extension of time. (a) Except as provided in subdivision (b), the board for good cause may extend for not to exceed one month the time for making any report or paying any tax.

(b) (1) In the case of a disaster, the board, for a period not to exceed three months, may extend the time for making any report or return or paying any tax required under this part. The extension may be granted at any time provided a request therefor is filed with the board within or before the period for which the extension may be granted.

(2) For purposes of this section, "disaster" means fire, flood, storm, tidal wave, earthquake, or similar public calamity, whether or not resulting from natural causes.

(c) Any person to whom an extension is granted and who pays the tax within the period for which the 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 the tax would have been due without the extension to the date of payment.

History—Stats. 1963, p. 1440, in effect September 20, 1963, substituted "one month" for "30 days" and "one-half of 1 percent per month or fraction thereof" for "6 percent per annum." Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted … 19269" for "rate … thereof" before "from." Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified … thereof" for "adjusted annual rate," substituted "Section 6591.5" for "Section 19269." Stats. 2016, Ch. 257 (AB 1559), in effect September 9, 2016, lettered first paragraph as subdivision (a), substituted "Except as provided in subdivision (b), the" for "The" before "board for good cause"; added new subdivision (b); and lettered former last paragraph as subdivision (c).

32253.5. Extension of time; state of emergency proclamation. (a) Subject to subdivision (c), if the Governor issues a state of emergency proclamation, the board may extend the time, for a period not to exceed three months, for making any report or return or paying any tax required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the board makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

(c) The board may make the extension in subdivision (a) only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less.

History—Added by Stats. 2022, ch. 299 (SB 440), effective January 1, 2023.

32254. Interest. [Repealed by Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001.]

32255. Penalty relief; reasonable cause for delay. (a) 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 may be relieved of the penalty provided by Sections 32252, 32260, 32291, and 32305.

(b) Except as provided in subdivisions (c) and (d), a 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 the person bases the claim for relief.

(c) (1) Subject to paragraph (2), the board may grant relief of the penalty for any person in an area identified in a state of emergency proclamation made by the Governor for the period the state of emergency proclamation is effective, regardless of whether the person has filed a statement with the board pursuant to subdivision (b).

(2) The board may grant the relief in paragraph (1) only during the first 12 months following the issuance of the state of emergency proclamation or during the duration of the state of emergency, whichever is less.

(d) The board shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

History—Added by Stats. 1963, ch. 1325, p. 2846, effective September 20, 1963. Amended by Stats. 1989, ch. 768, effective January 1, 1990, deleted "and" after "32291," and added", and 32305" after "32292," in the first paragraph; and added "or she" after "which he", and added "or her" after "bases his" in the second paragraph. Amended by Stats. 2000, ch. 923 (AB 2894) and Stats. 2000, ch. 1052 (AB 2898), effective January 1, 2001, added subdivision letter designation (a) before first paragraph, added "32260" after "32252" in subdivision (a); added subdivision letter designation (b) before second paragraph; substituted "Except as provided in subdivision (c), any" for "Any" before "person seeking to be relieved"; and added subdivision (c). Amended by Stats. 2001, ch. 251 (AB 1123), effective January 1, 2002, deleted "32292" after "32252, 32260, 32291," in subdivision (a). Amended by Stats. 2022, ch. 299 (SB 440), effective January 1, 2023, substituted "subdivisions (c) and (d), a" for "subdivision (c), any" after "Except as provided in" and substituted "the person bases the" for "he or she bases his or her" after "facts upon which" in subdivision (b); added subdivision (c); and relettered former subdivision (c) as subdivision (d).

32256. Interest relief; disaster. (a) If the board finds that a person's failure to make a timely report or payment was due to a disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the interest provided by Sections 32252, 32253, 32260, and 32291.

(b) Except as provided in subdivision (c), a person seeking to be relieved of the interest shall file with the board a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

(c) (1) Subject to paragraph (2), the board may grant relief of the interest for any person in an area identified in a state of emergency proclamation made by the Governor for the period the state of emergency proclamation is effective, regardless of whether the person has filed a statement with the board pursuant to subdivision (b).

(2) The board may grant the relief in paragraph (1) only during the first 12 months following the issuance of the state of emergency proclamation or during the duration of the state of emergency, whichever is less.

History—Added by Stats. 1981, ch. 947, effective January 1, 1982. Amended by stats. 2000, ch. 923 (AB 2894), effective January 1, 2001, added "32252" after "provided by Sections", deleted "32254" after "32253", and added "32260" after "32253" in the first paragraph; and added "or she" after "upon which he" and added "or her" after "bases his" in the second paragraph. Amended by Stats. 2022, ch. 299 (SB 440), effective January 1, 2023, designated former first paragraph as subdivision (a) and former second paragraph as subdivision (b); substituted "Except as provided in subdivision (c), a" for "Any" before "person seeking" and substituted "the person bases the" for "he or she bases his or her" after "facts upon which" in subdivision (b); and added subdivision (c).

32256.5. Interest relief. (a) The board, in its discretion, may relieve all or any part of the interest imposed on a person by this part 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.

(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 which 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 January 1, 2000.

History—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000. Stats. 2001, Ch. 251 (AB 1123), in effect January 1, 2002, substituted "this part" for "Sections 32254 and 32291" after "imposed on a person by" in subdivision (a).

32257. Reasonable reliance on written advice; relief of tax, penalty, and interest. (a) If the board finds that a person's failure to make a timely return or payment is due to the person's reasonable reliance on written advice from the board, the person may be relieved of the taxes imposed by this part and any penalty or interest added thereto.

(b) For purposes of this section, a person's failure to make a timely return or payment shall be considered to be due to reasonable reliance on written advice from the board, only if the board finds that all of the following conditions are satisfied:

(1) The person requested in writing that the board advise him or her whether a particular activity or transaction is subject to tax under this part. The specific facts and circumstances of the activity or transaction shall be fully described in the request.

(2) The board responded in writing to the person regarding the written request for advice, stating whether or not the described activity or transaction is subject to tax, or stating the conditions under which the activity or transaction is subject to tax.

(3) The liability for taxes applied to a particular activity or transaction which occurred before either of the following:

(A) Before the board rescinded or modified the advice so given, by sending written notice to the person of the rescinded or modified advice.

(B) Before a change in statutory or constitutional law, a change in the board's regulations, or a final decision of a court, which renders the board's earlier written advice no longer valid.

(c) Any person seeking relief under this section shall file with the board all of the following:

(1) A copy of the person's written request to the board and a copy of the board's written advice.

(2) A statement under penalty of perjury setting forth the facts on which the claim for relief is based.

(3) Any other information which the board may require.

(d) Only the person making the written request shall be entitled to rely on the board's written advice to that person.

History—Added by Stats. 1990, Ch. 987, in effect January 1, 1991.

32258. Relief of spouse. (a) Under regulations prescribed by the board, if:

(1) A tax liability under this part was understated by a failure to file a return required to be filed under this part, by the omission of an amount properly includable therein, or by erroneous deductions or credits claimed on a return, and the understatement of tax liability is attributable to one spouse; or any amount of the tax reported on a return was unpaid and the nonpayment of the reported tax liability is attributable to one spouse.

(2) The other spouse establishes that he or she did not know of, and had no reason to know of, that understatement or nonpayment.

(3) Taking into account whether the other spouse significantly benefited directly or indirectly from the understatement or the nonpayment and taking into account all other facts and circumstances, it is inequitable to hold the other spouse liable for the deficiency in tax attributable to that understatement or nonpayment, then the other spouse shall be relieved of liability for tax, including interest, penalties, and other amounts, to the extent that the liability is attributable to that understatement or nonpayment of tax.

(b) For purposes of this section, the determination of the spouse to whom items of understatement or nonpayment are attributable shall be made without regard to community property laws.

(c) This section shall apply to all calendar months, quarters, or years subject to this part, but shall not apply to a calendar month, quarter, or year that is more than five years from the final date on the board-issued determination, five years from the return due date for nonpayment on a return, or one year from the first contact with the spouse making a claim under this section; or that has been closed by res judicata, whichever is later.

(d) For purposes of paragraph (2) of subdivision (a), "reason to know" means whether a reasonably prudent person would have had reason to know of the understatement or nonpayment.

(e) For purposes of this section, with respect to a failure to file a return or an omission of an item from the return, "attributable to one spouse" may be determined by whether a spouse rendered substantial service as a manufacturer, winegrower, importer, or seller of beer or wine, or as a manufacturer, distilled spirits manufacturer's agent, brandy manufacturer, rectifier, wholesaler, or seller of distilled spirits to which the understatement is attributable. If neither spouse rendered substantial services as a manufacturer, winegrower, importer, or seller of beer or wine, or as a manufacturer, distilled spirits manufacturer's agent, brandy manufacturer, rectifier, wholesaler, or seller of distilled spirits, then the attribution of applicable items of understatement shall be treated as community property. An erroneous deduction or credit shall be attributable to the spouse who caused that deduction or credit to be entered on the return.

(f) Under procedures prescribed by the board, if, taking into account all the facts and circumstances, it is inequitable to hold the other spouse liable for an unpaid tax or any deficiency, or any portion of either, attributable to an item for which relief is not available under subdivision (a), the board may relieve the other spouse of that liability.

(g) For purposes of this section, registered domestic partners, as defined in Section 297 of the Family Code, have the same rights, protections, and benefits as provided by this section, and are subject to the same responsibilities, obligations, and duties as imposed by this section, as are granted to and imposed upon spouses.

(h) The relief provided by this section shall apply retroactively to liabilities arising prior to January 1, 2008.

History—Added by Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008. Stats. 2008, Ch. 179 (SB 1498), in effect January 1, 2009, deleted "or not" after "into account whether" and substituted a comma for "(" after "liability for tax" and for ")" after "and other amounts" in subdivision (a)(3); deleted "the provisions of" after "years subject to" and substituted "a" for "any" after "shall not apply to" in subdivision (c); deleted "or not" after "means whether" in subdivision (d); substituted "winegrower" for "wine-grower" after "service as a manufacturer," and added "a" after "beer or wine, or as" in the first sentence of, and substituted "winegrower" for "wine-grower" after "services as a manufacturer," and added "a" after "beer or wine, or as" in the second sentence to, subdivision (e); substituted "an" for "any" after "spouse liable for" and after "attributable to", substituted a comma for "( " after "unpaid tax or any" and ")" after "any portion of either" in subdivision (f); and substituted "January 1, 2008" for "the effective date of this section" after "liabilities arising prior to" in subdivision (h).

Article 1.1. Payment by Electronic Funds Transfer1

1Article 1.1 was added by Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001.

32260. Electronic funds transfer payments. (a) Any person whose estimated tax liability under this part averages twenty thousand dollars ($20,000) or more per month, as determined by the board pursuant to methods of calculation prescribed by the board, shall remit amounts due by an electronic funds transfer under procedures prescribed by the board.

(b) Any person whose estimated tax liability under this part averages less than twenty thousand dollars ($20,000) per month may elect to remit amounts due by electronic funds transfer with the approval of the board.

(c) Any person remitting amounts due pursuant to subdivision (a) or (b) shall perform electronic funds transfer in compliance with the due dates set forth in Article 1 (commencing with Section 32251). Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the state's demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state's demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs.

(d) Any person remitting taxes by electronic funds transfer shall, on or before the due date of the remittance, file a return for the preceding reporting period in the form and manner prescribed by the board. Any person who fails to timely file the required return shall pay a penalty of 10 percent of the amount of taxes, with respect to the period for which the return is required.

(e) Any person required to remit taxes pursuant to this article who remits those taxes by means other than appropriate electronic funds transfer shall pay a penalty of 10 percent of the taxes incorrectly remitted.

(f) Any person who fails to pay any tax to the state or any amount of tax required to be collected and paid to the state, except amounts of determinations made by the board under Article 2 (commencing with Section 32271) or Article 3 (commencing with Section 32291), within the time required shall pay a penalty of 10 percent of the tax or amount of tax, in addition to the tax or amount of tax, plus interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax became due and payable to the state until the date of payment.

(g) In determining whether a person's estimated tax liability averages twenty thousand dollars ($20,000) or more per month, the board may consider tax returns filed pursuant to this part and any other information in the board's possession.

(h) The penalties imposed by subdivisions (d), (e), and (f) shall be limited to a maximum of 10 percent of the taxes due for any one return. Any person remitting taxes by electronic funds transfer shall be subject to the penalties under this section and not Section 32252.

(i) The board shall promulgate regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code for purposes of implementing this section.

32261. Relief of penalty. If the board finds that a person's failure to make payment by an appropriate electronic funds transfer in accordance with board procedures is due to reasonable cause and circumstances beyond the person's control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, that person shall be relieved of the penalty provided in subdivision (e) of Section 32260. 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.

32262. Definitions. (a) "Electronic funds transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape, so as to order, instruct, or authorize a financial institution to debit or credit an account. Electronic funds transfers shall be accomplished by an automated clearinghouse debit, an automated clearinghouse credit, or by Federal Reserve Wire Transfer (Fedwire).

(b) "Automated clearinghouse" means any federal reserve bank, or an organization established in agreement with the National Automated Clearing House Association, that operates as a clearinghouse for transmitting or receiving entries between banks or bank accounts and which authorizes an electronic transfer of funds between these banks or bank accounts.

(c) "Automated clearinghouse debit" means a transaction in which the state, through its designated depository bank, originates an automated clearinghouse transaction debiting the person's bank account and crediting the state's bank account for the amount of tax. Banking costs incurred for the automated clearinghouse debit transaction shall be paid by the state.

(d) "Automated clearinghouse credit" means an automated clearinghouse transaction in which the person through his or her own bank originates an entry crediting the state's bank account and debiting his or her own bank account. Banking costs incurred for the automated clearinghouse credit transaction charged to the state shall be paid by the person originating the credit.

(e) "Fedwire transfer" means any transaction originated by a person and utilizing the national electronic payment system to transfer funds through the federal reserve banks, when that person debits his or her own bank account and credits the state's bank account. Electronic funds transfers pursuant to Section 32260 may be made by Fedwire only if payment cannot, for good cause, be made according to subdivision (a), and the use of Fedwire is preapproved by the board. Banking costs incurred for the Fedwire transaction charged to the person and to the state shall be paid by the person originating the transaction.

32263. Electronic filing. (a) Any return, declaration, statement, or other document required to be made under this part that is filed using electronic media shall be filed and authenticated pursuant to any method or form the board may prescribed.

(b) Notwithstanding any other law, any return, declaration, statement, or other document otherwise required to be signed that is filed by the taxpayer using electronic media in a form as required by the board shall be deemed to be a signed, valid original document, including upon reproduction to paper form by the board.

(c) Electronic media includes, but is not limited to, computer modem, magnetic media, optical disk, facsimile machine, or telephone.

History—Added by Stats. 2002, Ch. 459 (AB 1936), in effect January 1, 2003.

Article 2. Deficiency Determinations

32271. Deficiency. If the board is dissatisfied with the return or returns filed or amount of tax paid to the state by any taxpayer, it may compute and determine the amount to be paid based upon any information available to it. One or more additional determinations may be made of the amount of tax due for one or for more than one period. The amount of tax so determined shall bear interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the 15th day after the close of the period for which the amount of the tax, or any portion thereof, should have been reported until the date of payment. In making a determination, the board may offset overpayment for a period or periods against underpayments for another period or periods and against the interest and penalties on the underpayments. If any part of the deficiency for which a determination of an additional amount due is made is found to have been occasioned by negligence or intentional disregard of this part or authorized rules, a penalty of 10 percent of the amount of the determination shall be added, plus interest as above provided. If any part of the deficiency for which a determination of an additional amount due is made is found to be occasioned by fraud or an intent to evade this part or authorized rules, a penalty of 25 percent of the amount of the determination shall be added, plus interest as above provided. The board shall give to the taxpayer written notice of its determination. The notice shall be placed in a sealed envelope, with postage paid, addressed to the taxpayer at his address as it appears in the records of the board. The giving of notice shall be deemed complete at the time of the deposit of the notice in the United States Post Office, or a mailbox, sub-post office, substation or mail chute or other facility regularly maintained or provided by the United States Postal Service without extension of time for any reason. In lieu of mailing, a notice may be served personally by delivering to the person to be served and service shall be deemed complete at the time of delivery. Personal service to a corporation may be made by delivery of a notice to any person designated in the Code of Civil Procedure to be served for the corporation with summons and complaint in a civil action.

History—Stats. 1957, p. 2023, effective September 11, 1957, revised the provision regarding the complete mailing of the notice. Stats. 1974, Ch. 610, effective January 1, 1975, revised the provision regarding notice service of the notice of determination and deleted the reference to C.C.P. 1013. Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1975, Ch. 1186, in effect January 1, 1976, substituted "period" for "month" and "period or periods" for "month or months." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted … 19269" for "rate … thereof" before "from" in the third sentence. Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified … thereof" for "adjusted annual rate," substituted "Section 6591.5" for "Section 19269," changed "15th" to "fifteenth" before "day," deleted "such" before "delivery" before last sentence.

Second deficiency assessment.—After expiration of the period within which the taxpayer may petition for reassessment of tax, the State Board of Equalization may make a second deficiency tax assessment for the same taxpaying period for which the board had previously made a deficiency assessment. Wardall v. State of California, (1947) 29 Cal.2d 639.

32272. Limitation period. Except in the case of a fraud, intent to evade this part or authorized rules and regulations, or failure to make a return, every notice of a determination of an additional amount due shall be given within three years after the date when the amount should have been paid or the return was due, or within three years after the return was filed, whichever period expires later. In the case of failure to make a return, the notice of determination shall be mailed within eight years after the date the return was due.

History—Stats. 1957, p. 2024, in effect September 11, 1957, substituted "fraud, intent to evade this part or authorized rules and regulations, or failure" for "fraudulent return or neglect or refusal" in first sentence and added second sentence. Stats. 1993, Ch. 1113, in effect January 1, 1994, substituted "paid or the … expires later" for "returned" in the first sentence.

32272.1. Limitations; deficiency determination; decedent. In the case of a deficiency arising under this part during the lifetime of a decedent, a notice of deficiency determination shall be mailed within four months after written request therefor, in the form required by the board, by the fiduciary of the estate or trust or by any other person liable for the tax or any portion thereof.

History—Added by Stats. 1968, p. 2450, in effect November 13, 1968.

32273. Waiver. If before the expiration of the time prescribed in Section 32272 for the mailing of a notice of deficiency determination the taxpayer has consented in writing to the mailing of the notice after such time, the notice may be mailed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

History—Added by Stats. 1965, p. 4442, in effect September 17, 1965.

Article 3. Determinations If No Return Made

32291. Failure to file return. If any taxpayer fails to make a return required by this part, the board shall make an estimate, based upon any information available to it, for the period or periods with respect to which the taxpayer failed to make a return of all alcoholic beverages sold in this state by him or her. Upon the basis of this estimate the board shall compute and determine the amount required to be paid to the state, adding to the sum thus fixed a penalty equal to 10 percent thereof. One or more determinations may be made of the amount of tax due for one or for more than one period. The amount of tax so determined shall bear interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the 15th day of the month following the close of the period for which the amount of the tax, or any portion thereof, should have been returned until the date of payment. In making a determination the board may offset overpayments for a period or periods against underpayments for another period or periods and against interest and penalties on the underpayments. If any part of the deficiency for which a determination is made is due to negligence or intentional disregard of this part or authorized rules, an additional penalty of 10 percent of the amount of the determination shall be added. If the neglect or refusal of a taxpayer to file a return as required by this part was due to fraud or an intent to evade the tax, there shall be added to the tax a penalty equal to 25 percent thereof in addition to the 10 percent penalty. The board shall give to the taxpayer written notice of the estimate and determination, the notice to be served personally or by mail in the same manner as prescribed for service of notice by Section 32271.

History—Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "1 percent" for "one-half of 1 percent." Stats. 1975, Ch. 1186, in effect January 1, 1976, substituted "period" for "month", "period or periods" for "month or months", and "of the calendar month following the close of the period" for "after the close of the month." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted … 19269" for "rate … thereof" before "from" in the fourth sentence. Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified … thereof" for "adjusted annual rate" before "established," substituted "Section 6591.5" for "Section 19269." Stats. 1996, Ch. 1087, in effect January 1, 1997, added "or her" after "state by him" in the first sentence and substituted "10" for "5" after "penalty equal to" in the second sentence and after "addition to the" in the seventh sentence.

32292. Penalty for failure to file. [Repealed by Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001.]

Article 4. Redeterminations

32301. Petition for redetermination. Any person from whom an amount is determined to be due under Article 2 (commencing with Section 32271) or 3 (commencing with Section 32291) or any person directly interested may petition for a redetermination thereof within 30 days after service upon him or her of notice of the determination. If a petition for redetermination is not filed within the 30-day period, the amount determined to be due becomes final at the expiration thereof.

History—Stats. 1957, p. 2024, in effect September 11, 1957, substituted "30" for "15" days. Stats. 1967, p. 2329, in effect November 8, 1967, deleted all former language following "expiration thereof" and reenacted same as Sections 32302–32306. Stats. 1982, Ch. 454, in effect January 1, 1983, substituted "Article 2 (commencing with Section 32271) or 3 (commencing with Section 32291)" for "Article 2 or 3 of this chapter" after "under" and added "or her" after "him" in the first sentence.

32301.5. Form and content. Every petition for redetermination shall be in writing and shall state the specific grounds upon which the petition is founded. The petition may be amended to state additional grounds at any time prior to the date on which the board issues its order or decision upon the petition for redetermination.

History—Added by Stats. 1967, p. 2329, in effect November 8, 1967.

32302. Oral hearing. If a petition for redetermination is filed within the 30-day period, the board shall reconsider the amount determined to be due, and if the person has so requested in his petition, shall grant him an oral hearing and shall give him 10 days' notice of the time and place of the hearing. The board may continue the hearing from time to time as may be necessary.

History—Added by Stats. 1967, p. 2329, in effect November 8, 1967, formerly part of Section 32301.

32303. Decrease or increase of determination. The board may decrease or increase the amount of the determination before it becomes final, but the amount may be increased only if a claim for the increase is asserted by the board at or before the hearing. Unless the 25 percent penalty imposed by Section 32271 or Section 32291 applies to the amount of the determination as originally made or as increased, the claim for increase must be asserted within eight years after the date the return for the period for which the increase is asserted was due.

History—Added by Stats. 1967, p. 2329, in effect November 8, 1967, formerly part of Section 32301. Stats. 1969, p. 895, in effect November 10, 1969, revised the first sentence and added the second sentence.

32304. Finality date of order or decision. The order or decision of the board upon a petition for redetermination shall become final 30 days after service upon the petitioner of notice thereof.

History—Added by Stats. 1967, p. 2329, in effect November 8, 1967, formerly part of Section 32301.

32305. Due date of determinations; penalty. All amounts determined to be due by the board under Article 2 or 3 of this chapter are due and payable at the time they become final, and if not paid when due and payable, there shall be added thereto a penalty of 10 percent of the amount determined to be due.

History—Added by Stats. 1967, p. 2330, in effect November 8, 1967, formerly part of Section 32301.

32306. Service of notice. Any notice required by this section shall be served personally or by mail in the same manner as prescribed for service of notice by Section 32271.

History—Added by Stats. 1967, p. 2330, in effect November 8, 1967, formerly part of Section 32301.

Article 5. Jeopardy Determinations

32311. Basis for jeopardy determination. If the board believes that the collection of any amount of tax will be jeopardized by delay, it shall thereupon make a determination of the amount of tax due, noting that fact upon the determination, and the amount of tax shall be immediately due and payable. If the amount of the tax, interest, and penalty specified in the jeopardy determination is not paid, or a petition for redetermination is not filed, within 10 days after the service upon the taxpayer of notice of the determination, the determination becomes final, and the delinquency penalty and interest provided in Section 32252 shall attach to the amount of tax specified therein.

History—Stats. 2000, Ch. 923 (AB 2894), substituted "Section" for "Sections" after "interest provided in", deleted "and 32254" after "provided in Section 32252" in the second sentence.

32312. Petition for redetermination; security. The taxpayer against whom a jeopardy determination is made may file a petition for the redetermination thereof, pursuant to Article 4 of this chapter, with the board within 10 days after the service upon him of notice of the determination, but he shall within the 10-day period deposit with the board such security as it deems necessary to insure compliance with the provisions of this part. The security may be sold by the board at public sale if it becomes necessary in order to recover any amount due under this part. Notice of the sale may be served upon the person who deposited the security personally or by mail in the same manner as prescribed for service of notice by Section 32271. Upon any such sale, the surplus, if any, above the amount due under this division shall be returned to the person who deposited the security.

History—Stats. 1967, p. 2330, in effect November 8, 1967, added "pursuant to Article 4 of this chapter."

32313. Administrative hearing. In accordance with such rules and regulations as the board may prescribe, the person against whom a jeopardy determination is made may apply for an administrative hearing for one or more of the following purposes:

(a) To establish that the determination is excessive; or

(b) To establish that the sale of property that may be seized after issuance of the jeopardy determination or any part thereof shall be delayed pending the administrative hearing because the sale would result in irreparable injury to the person; or

(c) To request the release of all or a part of the property to the person; or

(d) To request a stay of collection activities. The application shall be filed within 30 days after service of the notice of jeopardy determination and shall be in writing and state the specific factual and legal grounds upon which it is founded. No security need be posted to file the application and to obtain this hearing. However, if the person does not deposit within the 10-day period prescribed in Section 32312, such security as the board may deem necessary to ensure compliance with this part, the filing of the application shall not operate as a stay of collection activities, except sale of property seized after issuance of the jeopardy determination. Upon a showing of good cause for failure to file a timely application for administrative hearing, the board may allow a filing of the application and grant the person an administrative hearing. The filing of an application pursuant to this section shall not affect provisions of Section 32311 relating to the finality date of the determination or to penalty or interest.

History—Added by Stats. 1977, Ch. 329, effective January 1, 1978.

32320. Penalty interest rates. [Repealed by Stats. 1985, Ch. 20, operative July 1, 1985.]