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Business Taxes Law Guide—Revision 2024

BTLG Table of Contents > Diesel Fuel Tax Law > Chapter 8 > entire chapter

Diesel Fuel Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 31. Diesel Fuel Tax Law

Chapter 8. Overpayments and Refunds.


Article 1 Refunds on Certain Sales and Uses

Article 2 Claim for Refund

Article 3 Suit for Refund

Article 4 Recovery of Erroneous Refunds

Article 5 Cancellations

Chapter 8. Overpayments and Refunds.

Article 1. Refunds on Certain Sales and Uses

60501. Overpayments; credits and refunds. Persons who have paid a tax for diesel fuel lost, sold, or removed as provided in paragraph (4) of subdivision (a), or used in a nontaxable use, other than on a farm for farming purposes or in an exempt bus operation, shall, except as otherwise provided in this part, be reimbursed and repaid the amount of the tax.

(a)Except as otherwise provided in subdivision (b), a claim for refund with respect to diesel fuel is allowed under this section only if all of the following apply:

(1) Tax was imposed on the diesel fuel to which the claim relates.

(2) The claimant bought or produced the diesel fuel and did not sell or resell it in this state except as provided in paragraph (4).

(3) The claimant has filed a timely claim for refund that contains the information required under subdivision (b) and the claim is supported by the original invoice or original invoice facsimile retained in an alternative storage media showing the purchase. If no original invoice was created, electronic invoicing shall be accepted as reflected by a computerized facsimile when accompanied by an original copy of the bill of lading or fuel manifest that can be directly tied to the electronic invoice.

(4) The diesel fuel was any of the following:

(A) Used for purposes other than operating motor vehicles upon the public highways of the state.

(B) Exported for use outside of this state. Diesel fuel carried from this state in the fuel tank of a motor vehicle is not deemed to be exported from this state unless the diesel fuel becomes subject to tax as an import under the laws of the destination state.

(C) Used in any construction equipment that is exempt from vehicle registration pursuant to the Vehicle Code, while operated within the confines and limits of a construction project.

(D) Used in the operation of a motor vehicle on any highway that is under the jurisdiction of the United States Department of Agriculture and with respect to the use of the highway the claimant pays, or contributes to, the cost of construction or maintenance thereof pursuant to an agreement with, or permission of, the United States Department of Agriculture.

(E) Used in any motor vehicle owned by any county, city and county, city, district, or other political subdivision or public agency when operated by it over any highway constructed and maintained by the United States or any department or agency thereof within a military reservation in this state. If the motor vehicle is operated both over the highway and over a public highway outside the military reservation in a continuous trip the tax shall not be refunded as to that portion of the diesel fuel used to operate the vehicle over the public highway outside the military reservation.

Nothing contained in this section shall be construed as a refund of the tax for the use of diesel fuel in any motor vehicle operated upon a public highway within a military reservation, which highway is constructed or maintained by this state or any political subdivision thereof.

As used in this section, "military reservation" includes any establishment of the United States Government or any agency thereof used by the Armed Forces of the United States for military, air, or naval operations, including research projects.

(F) Sold by a supplier and which was sold to any consulate officer or consulate employee under circumstances which would have entitled the supplier to an exemption under paragraph (6) of subdivision (a) of Section 60100 if the supplier had sold the diesel fuel directly to the consulate officer or consulate employee.

(G) Lost in the ordinary course of handling, transportation, or storage.

(H) (i) Sold by a person to the United States and its agencies and instrumentalities under circumstances that would have entitled that person to an exemption from the payment of diesel fuel tax under Section 60100 had that person been the supplier of this diesel fuel.

(ii) Sold by a supplier and which was sold by credit card to the United States and its agencies and instrumentalities under circumstances which would have entitled the supplier to an exemption under Section 60100 if the supplier had sold the diesel fuel directly to the United States and its agencies and instrumentalities.

(I) Sold by a person to a train operator for use in a diesel-powered train or for other off-highway use under circumstances that would have entitled that person to an exemption from the payment of diesel fuel tax under Section 60100 had that person been the supplier of this diesel fuel.

(J) 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.

(b) Where tax is not imposed on dyed blended biodiesel fuel upon removal from an approved terminal at the terminal rack, if tax was previously imposed on the biodiesel fuel portion of the dyed blended biodiesel fuel, then, pursuant to paragraph (1) of subdivision (a), a claim for refund is allowed for the tax that was paid on that 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.

(c) Each claim for refund under this section shall contain the following information with respect to all of the diesel fuel covered by the claim:

(1) 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.

(2) A statement by the claimant that the diesel fuel covered by the claim did not contain visible evidence of dye.

(3) A statement, which may appear on the invoice, original invoice facsimile, or similar document, by the person that sold the diesel fuel to the claimant that the diesel fuel sold did not contain visible evidence of dye.

(4) The total amount of diesel fuel covered by the claim.

(5) The use made of the diesel fuel covered by the claim described by reference to specific categories listed in paragraph (4) of subdivision (a).

(6) If the diesel fuel covered by the claim was exported, a statement that the claimant has the proof of exportation.

(d) Each claim for refund under this section shall be made on a form prescribed by the board and shall be filed for a calendar year. If, at the close of any of the first three quarters of the calendar year, more than seven hundred fifty dollars ($750) is refundable under this section with respect to diesel fuel used or exported during that quarter or any prior quarter during the calendar year, and for which no other claim has been filed, a claim may be filed for the quarterly period. To facilitate the administration of this section, the board may require the filing of claims for refund for other than yearly periods.

History—Stats. 1995, Ch. 34 (SB 1131), in effect June 30, 1995, but operative July 1, 1995, added paragraph (G) to subdivision (a). Stats. 1995, Ch. 555 (SB 718), in effect January 1, 1996, added subdivision (c). Stats. 1997, Ch. 76 (SB 612), in effect July 16, 1997, added the second sentence to paragraph (3) of, substituted "Lost in the ordinary course of handling, transportation, or storage." for "Any person who sells diesel fuel to the United States and its agencies and instrumentalities under circumstances that would have entitled him or her to an exemption from the payment of diesel fuel tax under Section 60100 had he or she been the supplier of this diesel fuel." in paragraph (G) of, and added paragraphs (H) and (I) to, subdivision (a). Stats. 1998, Ch. 350 (SB 2231), in effect January 1, 1999, added "lost, sold as provided in paragraph (4) of subdivision (a), or" after "for diesel fuel" in the first paragraph; added "except as provided in paragraph (4) of subdivision (a)" after "in this state" in subparagraph (2) of subdivision (a); and added "of" after "respect to all" in subdivision (b). Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, added ", or removed" after "fuel lost, sold" in the first paragraph, and added subparagraph (J) to subdivision (a)(4). Stats. 2003, Ch. 316 (AB 1744), effective January 1, 2004, added "or original invoice facsimile retained in an alternative storage media" after "is supported by the original invoice" in the first sentence of subdivision (a)(3); substituted "Government" for "government" after "establishment of the United States" in the third paragraph of subdivision (a)(4)(E); added "original invoice facsimile," after "which may appear on the invoice" in subdivision (b)(3). Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010, deleted "of subdivision (a)" after "provided in paragraph (4)" in paragraph (2) of, substituted "Armed Forces" for "armed forces" in paragraph (4)(E) of, added "and which was sold" after "sold by a supplier" and before "to any consulate officer" in paragraph (4)(F) of, and added subparagraph heading (i), and added subparagraph (ii), to paragraph (4)(H) of, subdivision (a). Stats. 2015, Ch. 481 (AB 1032), in effect January 1, 2016, substituted "Except as otherwise provided in subdivision (b), a" for "A" before "claim for refund" in subdivision (a); added subdivision (b); relettered former subdivision (b) as subdivision (c); and relettered former subdivision (c) as subdivision (d).

60502. Refund; ultimate vendor. (a) Any ultimate vendor who has paid a tax on diesel fuel sold to an ultimate purchaser for use on a farm for farming purposes or use in an exempt bus operation shall, except as otherwise provided in this part, be reimbursed and repaid the amount of the tax.

(b) A claim for refund with respect to diesel fuel is allowed under this section only if all of the following apply:

(1) Tax was imposed on the diesel fuel to which the claim relates.

(2) The claimant sold the diesel fuel to the ultimate purchaser for use on a farm for farming purposes or for use in an exempt bus operation.

(3) The claimant is a registered ultimate vendor.

(4) The claimant has filed a timely claim for refund that contains the information required under subdivision (c) and the claim is supported by the original invoice showing the purchase. If no original invoice was created, electronic invoicing shall be accepted as reflected by a computerized facsimile when accompanied by an original copy of the bill of lading or fuel manifest that can be directly tied to the electronic invoice.

(c) Each claim for refund under this section shall contain the following information with respect to all the diesel fuel covered by the claim:

(1) The claimant's permit number.

(2) The name, address, telephone number, and permit number of each person that sold the diesel fuel to the claimant and the date of the purchase.

(3) 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 that the claimant sold to each.

(4) A statement that the diesel fuel covered by the claim did not contain visible evidence of dye.

(5) The total amount of diesel fuel covered by the claim.

(6) A statement that the claimant has not included the amount of the tax in its sales price of the diesel fuel and has not collected the amount of tax from its buyer.

(7) A statement that the claimant has in its possession an unexpired exemption certificate described in Section 60503 and the claimant has no reason to believe any information in the certificate is false.

(8) A statement that the amounts claimed have not been previously refunded to the claimant and that there are no other claims outstanding for the amounts included in the current claim.

(d) Each claim for refund under this section shall be made on a form prescribed by the board and shall be for an amount of not less than two hundred dollars ($200) and for a period of not less than one week.

History—Stats. 1995, Ch. 555, in effect January 1, 1996, added subdivision (d). Stats. 1997, Ch. 76 (SB 612), in effect July 16, 1997, added the second sentence to paragraph (4) of subdivision (b) and added paragraph (8) to subdivision (c).

60502.1. Prohibition of tax reimbursement. No tax shall be included in the sales price or on the sales invoice by the ultimate vendor on diesel fuel sold to an ultimate purchaser.

60502.2. Tax; exempt bus operators. Notwithstanding the refund provided for by Section 60502 and the exemption provided for by subparagraph (B) of paragraph (5) of subdivision (a) of Section 60100, any exempt bus operation using diesel fuel on which the tax has been refunded under Section 60502 or exempt from tax under subparagraph (B) of paragraph (5) of subdivision (a) of Section 60100 shall, for the privilege of operating buses on state highways and freeways, make a payment equal to one cent ($0.01) for each gallon of the refunded or exempt diesel fuel used. The payments required by this subdivision shall be paid to the State Board of Equalization in the manner prescribed by the board, and the payments shall be treated as a tax for all purposes of this part.

60503. Form of exemption certificate. (a) The certificate to be provided to the ultimate vendor consists of a statement that is signed under penalty of perjury by a person with authority to bind the buyer. A new certificate shall be given if any information in the current certificate changes. The certificate may be included as part of any business records normally used to document a sale. The certificate expires on the earliest of the following dates:

(1) The date one year after the effective date of the certificate.

(2) The date a new certificate is provided to the seller.

(b) An exemption certificate for diesel fuel used on a farm for farming purposes or for diesel fuel used in an exempt bus operation shall contain that information and be in the form as the board may prescribe.

History—Stats. 1998, Ch. 350 (SB 2231), in effect January 1, 1999, deleted "(which may be not earlier than the date it is signed)" after "of the certificate" in subparagraph (1) of subdivision (a); substituted "An exemption certificate … board may prescribe." for "The certificate for a farmer is the "CERTIFICATE OF FARMER OR STATE OR LOCAL GOVERNMENT UNIT" required by the Internal Revenue Service." in subdivision (b); and deleted subdivision (c) which read: "The certificate for an exempt bus operator is a copy of the exempt bus operator's license issued by the board."

60503.1. Misuse of exemption certificate. If a purchaser gives a Section 60503 exemption certificate to an ultimate vendor to the effect that the diesel fuel purchased will be used on a farm for farming purposes or in an exempt bus operation, and sells the diesel fuel or uses the diesel fuel in some other manner or for some other purpose, the purchaser will be liable for payment of the tax under Chapter 2 (commencing with Section 60050) of this part. The tax, applicable penalties, and interest shall become due and payable and shall be ascertained and determined in the same manner as the backup tax under Section 60361.5.

History—Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, deleted "as if the purchaser were a supplier of the diesel fuel at the time of that sale or use" after "Section 60050) of this part" in the first sentence, and added the second sentence.

60503.2. Punishments. (a) Any person, including any officer or employee of a corporation, who gives a Section 60503 exemption certificate for diesel fuel that he or she knows at the time of purchase is not to be used by him or her or the corporation on a farm for farming purposes or in an exempt bus operation, for the purpose of evading payment to the ultimate vendor of the amount of the tax applicable to the transaction, is guilty of either a misdemeanor punishable as provided in Section 60706 or a felony punishable as provided in Section 60707.

(b) Any person, including any officer or employee of a corporation, who gives an exemption certificate for diesel fuel pursuant to Section 60503 that he or she knows at the time of purchase is not to be used by him or her or the corporation on a farm for farming purposes or in an exempt bus operation, is liable to the state for the amount of tax that would be due if he or she had not given that certificate. In addition to the tax, the person shall be liable to the state for a penalty of 25 percent of the tax or one thousand dollars ($1,000), whichever is greater, for each certificate issued for personal gain or to evade the payment of taxes.

History—Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, substituted "one thousand dollars ($1,000)," for "five hundred dollars ($500)" and substituted "certificate issued" for "purchase made" after "for each", in the second sentence of subdivision (b).

60504. Trace amounts of dyed fuel. For the purpose of refund claims filed pursuant to this article, diesel fuel containing a de minimis quantity of dye shall not be considered diesel fuel containing visible evidence of dye.

60505. Refund. The board, upon the presentation of the claim and the invoice, shall cause to be paid to the claimant from the taxes collected under this part an amount equal to the taxes collected on the diesel fuel with respect to which the refund is claimed under this article. If no original invoice was created, electronic invoicing shall be accepted as reflected by a computerized facsimile when accompanied by an original copy of the bill of lading or fuel manifest that can be directly tied to the electronic invoice.

History—Stats. 1997, Ch. 76 (SB 612), in effect July 16, 1997, added the second sentence.

60505.5. Refund; electronic media. The claim for refund forms prescribed in subdivision (d) of Section 60501 and subdivision (d) of Section 60502 may include, but not be limited to, electronic media. The claim for refund forms shall be authenticated in a form or pursuant to methods as may be prescribed by the board.

History—Added by Stats. 2002, Ch. 459 (AB 1936), in effect January 1, 2003. Stats. 2015, Ch. 481 (AB 1032), in effect January 1, 2016, substituted "(d)" for "(c)" in the first sentence.

60506. Examination of books and records. In order to establish the validity of any claim, the board may, upon demand, examine the books and records of the claimant for that purpose. The failure of the claimant to accede to that demand constitutes a waiver of any right to the refund claimed on account of the transactions questioned.

60507. Claim; limitation period. All applications for refund provided under this article shall be filed within three years from the date of the purchase of the diesel fuel or, if the tax was not invoiced at the time of the purchase of the diesel fuel, the application for refund shall be filed within six months after the receipt of an invoice for the tax, whichever period expires later. Any application filed after the time prescribed shall not be considered for any purpose by the board, the Treasurer, or the state.

History—Stats. 2003, Ch. 605 (SB 1060), effective January 1, 2004, added "or, if the tax was not invoiced … whichever period expires later" after "date of the purchase of the diesel fuel" in the first sentence.

60508. Credit allowed on supplier's return. In lieu of the collection and refund of the tax on tax-paid diesel fuel exported, removed, sold, or used by a supplier in a manner that would entitle the supplier to claim a refund under this article, credit may be given the supplier upon the supplier's tax return and the determination of the amount of the supplier's tax shall be in accordance with any rules and regulations the board may prescribe.

History—Stats. 2009, Ch. 545, in effect January 1, 2010, added "tax-paid" after "the tax on" and before "diesel fuel", added "exported, removed, sold, or" after "diesel fuel" and before "used by a", substituted "a" for "the" after "supplier in" and after "manner", substituted "that" for "as" after "a manner" and before "would entitle", substituted "the supplier" for "a purchaser" after "would entitle" and before "to claim", added "a" after "to claim" and before "refund under this article", and added "shall be in accordance with any rules and regulations the board may prescribed" to the end of the paragraph.

60508.1. Credit; consulate officers and consulate employees. [Repealed by Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010.]

60508.2. Credit; ultimate purchaser. [Repealed by Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010.]

60508.3. Credit; government entity. In lieu of the refund of tax on diesel fuel used by a government entity in the manner as would entitle a government entity to claim a refund under this article, credit may be given to the government entity upon the government entity's tax return and the demonstration of the amount of the government entity's tax.

History—Added by Stats. 1995, Ch. 34, in effect June 30, 1995, but operative July 1, 1995.

60508.4. Credit in lieu of refund; tax-paid fuel removed at rack. [Repealed by Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010.]

60509. Credit; exports. [Repealed by Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010.]

60510. No refund for spillage. [Repealed by Stats. 1997, Ch. 76 (SB 612), in effect July 16, 1997.]

60511. Interest. Interest shall be paid upon any refund of tax at the modified adjusted rate per month established pursuant to Section 6591.5 from the first day of the calendar month following the day a properly completed claim for refund was received by the board on any claim that has not been paid within 20 calendar days of the receipt of a properly completed claim form by the board.

The interest shall be paid to the last day of the month following the date upon which the claim is approved by the board.

No interest shall be granted on credits taken on tax returns.

History—Stats. 1997, Ch. 76 (SB 612), in effect July 16, 1997, substituted "first day of … by the board" for "last day of the month following the day the diesel was purchased" after "6591.5 from the" in the first paragraph.

60512. Claim payment deadline. (a) A refund filed pursuant to Section 60502 shall be paid to the claimant within 20 calendar days of the receipt of a claim for refund by the board.

(b) Notwithstanding subdivision (a), the claim for refund must be submitted on a properly completed form or in a substantially similar format, as prescribed by the board.

History—Stats. 1995, Ch. 34, in effect June 30, 1995, but operative July 1, 1995.

Article 2. Claim for Refund

60521. Credits and refunds. If the department determines that any amount not required to be paid under this part has been paid by any person to the state, the department shall set forth that fact in its records and certify the amount paid in excess of the amount legally due and the person by whom the excess was paid to the department or from whom it was collected. The excess amount paid or collected shall be credited on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall either be refunded to the person, or the person’s successors, administrators, executors, or assigns, or, if authorized by the department, deducted by the person from any amounts to become due from the person under this part.

For any amount exceeding fifty thousand dollars ($50,000), the department’s determination under this section shall be available as a public record for at least 10 days after the effective date of the determination.

History—Stats. 1995, Ch. 34, in effect June 30, 1995, but operative July 1, 1995, added "government entity," after "exempt bus operator," in the first sentence of the first paragraph. Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "user" for "trucker" after "supplier, interstate" in the first paragraph. Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, substituted "to the state" for "that is a licensed supplier, interstate user, exempt bus operator, government entity, highway vehicle operator, or end seller" after "paid by any person" in the first sentence of the first paragraph. Stats. 2022, Ch. 474 (SB 1496), in effect January 1, 2023, substituted "department" for "board" throughout; substituted "the person’s" for "his or her" after "to the person, or" and substituted "the person" for "him or her" after "become due from" in the second sentence of the first paragraph; and substituted "department’s" for "board’s proposed" after "fifty thousand dollars ($50,000), the" and substituted "after" for "prior to" after "10 days" in the second paragraph.

60521.5. Excess tax reimbursement. When an amount represented by a person who is a taxpayer under this part to a customer as constituting reimbursement for taxes due under this part is computed upon an amount that is not taxable or is in excess of the taxable amount and is actually paid by the customer to the person, the amount so paid shall be returned by the person to the customer upon notification by the State Board of Equalization or by the customer that the excess has been ascertained. If the person fails or refuses to do so, the amount so paid, if knowingly or mistakenly computed by the person upon an amount that is not taxable or is in excess of the taxable amount, shall be remitted by that person to this state. Those amounts remitted to the state shall be credited by the board on any amounts due and payable under this part on the same transaction from the person by whom it was paid to this state and the balance, if any, shall constitute an obligation due from the person to this state.

History—Added by Stats. 1996, Ch. 1087, in effect January 1, 1997.

60522. Credits and refunds; claim; limitation periods. (a) Except as provided in subdivision (b), no refund under Section 60521 shall be approved by the board after three years from the last day of the month following the reporting period for which the overpayment was made, or, with respect to determinations made under Article 2 (commencing with Section 60301), Article 3 (commencing with Section 60310), or Article 4 (commencing with Section 60330) of Chapter 6, after six months from the date the determinations became final, or after six months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the board within that period. No credit shall be approved by the board after the expiration of the period unless a claim for credit is filed with the board within that period or unless the claim relates to a period for which a waiver has been given pursuant to Section 60317.

(b) A refund may be approved by the board for any period for which a waiver is given under Section 60317 if a claim therefor is filed with the board before the expiration of the period agreed upon.

60522.1. Claim limitation; financially disabled. (a) The limitation period specified in Section 60522 shall be suspended during any period of a person's life that the person is financially disabled.

(b) (1) For purposes of subdivision (a), a person is financially disabled if the person is unable to manage his or her financial affairs by reason of medically determinable physical or mental impairment of the person which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A person shall not be considered to have an impairment unless proof of the existence thereof is furnished in the form and manner as the board may require.

(2) A person shall not be treated as financially disabled during any period that the person's spouse or any other person is authorized to act on behalf of the person in financial matters.

(c) This section applies to periods of disability commencing before, on, or after the effective date of the act adding this section, but does not apply to any claim for refund that (without regard to this section) is barred by the operation or rule of law, including res judicata, as of the effective date of the act adding this section.

History—Added by Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001.

60522.2. Overpayments from levies or liens. Notwithstanding Section 60522, a refund of an overpayment of any tax, penalty, or interest collected by the board by means of levy, through the use of liens, or by other enforcement procedures, shall be approved if a claim for a refund is filed within three years of the date of an overpayment.

History—Added by Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007.

60522.3. Refund claim where tax has not been paid in full; timely filing. (a) A claim for refund that is otherwise valid under Sections 60522 and 60523 that is made 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.

(b) For purposes of this section, "amount of tax determined" means an amount of tax, interest, or penalty, with respect to a single determination made under Article 2 (commencing with Section 60301), Article 3 (commencing with Section 60310), or Article 4 (commencing with Section 60330) of Chapter 6.

(c) This section shall apply to all claims for refund on or after the effective date of the act adding this section.

History—Added by Stats. 2016, Ch. 98 (AB 1856), in effect January 1, 2017.

60523. Form and content of claim. The claim shall be in writing and shall state the specific grounds upon which it is founded.

60524. Interest. Interest shall be paid upon any overpayment of any amount of tax at the modified adjusted rate per month established pursuant to Section 6591.5 from the first day of the calendar month following the period during which the overpayment is made. In addition, a refund or credit shall be made of any interest imposed upon the claimant with respect to the amount being refunded or credited.

The interest shall be paid as follows:

(a) In the case of a refund, to the last day of the calendar month following the date upon which the person making the overpayment, if he or she has not already filed a claim, is notified by the board that a claim may be filed or the date upon which the claim is approved by the board, whichever date is the earlier.

(b) In the case of a credit, to the same date as that to which interest is computed on the tax or amount against which the credit is applied.

History—Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "first day of the calendar month" for "last day of the month" after "6591.5 from the" in the first paragraph; and added "calendar" after "day of the" in subdivision (a). Stats. 1997, Ch. 620 (SB 1102), in effect January 1, 1998, deleted "reporting" after "month following the" in the first sentence of the first paragraph.

60525. Disallowance of interest. (a) If the board determines that any overpayment has been made intentionally or by reason of carelessness, it shall not allow any interest thereon.

(b) If any person who has filed a claim for refund requests the board to defer action on the claim, the board, as a condition to deferring action, may require the claimant to waive interest for the period during which the person requests the board to defer action on the claim.

History—Stats. 1998, Ch. 420 (SB 2230), in effect January 1, 1999, added subdivision designation "(a)" and added subdivision (b).

Article 3. Suit for Refund

60541. Enjoining collection forbidden. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against this state or against any officer of the state to prevent or enjoin the collection under this part of any tax or other amounts required to be collected or to prevent or enjoin the revocation of any permit issued under this part or any other action whereby it is sought to enforce the payment of any tax or other amounts required to be paid.

60542. Necessity of refund claim. No suit or proceeding shall be maintained in any court for the recovery of any amount alleged to have been erroneously or illegally assessed or collected unless a claim for refund or credit has been duly filed.

60543. Action for refund; limitation. Within 90 days after the mailing of the notice of the board's action upon a claim for refund or credit, the claimant may bring an action against the board on the grounds set forth in the claim in a court of competent jurisdiction in the County of Sacramento for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.

60544. Refund claim not acted on. If the board fails to mail notice of action on a claim within six months after the claim is filed, the claimant may, prior to the mailing of notice by the board, consider the claim disallowed and bring an action against the board on the grounds set forth in the claim for recovery of the whole or any part of the amount claimed as an overpayment.

60545. Failure to bring timely suit. Failure to bring suit or action within the time specified in this article constitutes a waiver of all demands against the state on account of any alleged overpayment.

60546. Credit or refund. If judgment is rendered for the plaintiff, the amount of the judgment shall first be credited on any amounts due from the plaintiff under this part, Part 2 (commencing with Section 7301), and Part 3 (commencing with Section 8601), and the balance of the judgment shall be refunded to the plaintiff.

60547. Interest. In any judgment, interest shall be allowed at the modified adjusted rate per annum established pursuant to Section 6591.5 upon the amount found to have been illegally collected from the date of payment thereof to the date of allowance of credit on account of the judgment or to a date preceding the date of the refund warrant by not more than 30 days, the date to be determined by the board.

60548. Judgment for assignee forbidden. A judgment shall not be rendered in favor of the plaintiff in any action brought against the board to recover any amount paid when the action is brought by or in the name of an assignee of the person paying the tax or by any person other than the person who paid the tax.

Article 4. Recovery of Erroneous Refunds

60561. Erroneous refunds; action. (a) The board may recover any refund or part thereof that is erroneously made, and any credit or part thereof that is erroneously allowed, in an action brought in a court of competent jurisdiction in the County of Sacramento in the name of the people of the State of California.

(b) As an alternative to subdivision (a), the board may recover any refund or part thereof that is erroneously made, and any credit or part thereof that is erroneously allowed. In recovering any erroneous refund or credit, the board may, in its discretion, issue a deficiency determination in accordance with Article 3 (commencing with Section 60310) or Article 4 (commencing with Section 60330) of Chapter 6. Except in the case of fraud, the deficiency determination shall be made by the board within three years from the date of the Controller's warrant or date of credit.

History—Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, substituted ", the board may … its discretion issue" for "in recovering the erroneous refunds or credits, the board in its discretion, may" after "to subdivision (a)", added "deficiency" after "of fraud, the", and substituted "by the board … date of credit" for "within three years from the last day of the month following the reporting period in which the board certifies that the amount collected was in excess of the amount legally due", in subdivision (b).

Note.—SEC. 61. of Stats. 1998, Ch. 609 (SB 2232), effective January 1, 1999, states: It is the intent of the Legislature in enacting those provisions of this act that allow the State Board of Equalization to recover refunds administratively that no increase in taxpayer costs result from taxpayer compliance with these provisions.

60562. Place of trial. In any action brought pursuant to subdivision (a) of Section 60561, the court may, with the consent of the Attorney General, order a change in the place of trial.

History—Added by Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999.

60563. Rules of procedure, etc. The Attorney General shall prosecute any action brought pursuant to subdivision (a) of Section 60561, and the provisions of the Code of Civil Procedure relating to service of summons, pleadings, proof, trials, and appeals shall apply to the proceedings.

History—Added by Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999.

60564. Interest on erroneous refunds. (a) Notwithstanding any other provision of this part, if the department finds that neither the person liable for payment of tax nor any party related to that person has in any way caused an erroneous refund for which an action for recovery is provided under Section 60561, no interest shall be imposed on the amount of that erroneous refund until 30 days after the date on which the department serves a notice of determination for repayment of the erroneous refund to the person. The act of filing a claim for refund shall not be considered as causing the erroneous refund.

(b) This section shall be operative for any action for recovery under Section 60561 on or after January 1, 2000.

History—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000. . Stats. 2024, Ch. 499 (SB 1528), in effect January 1, 2025, substituted "department" for "board" after "if the" and "department serves" for "board mails" after "which the" in the first sentence of subdivision (a).

Article 5. Cancellations

60581. Cancellation of determination; procedure. If any amount has been illegally determined either by the person filing the return or by the department, the department shall set forth that fact in its records and certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made. For any amount exceeding fifty thousand dollars ($50,000), the department’s determination under this section shall be available as a public record for at least 10 days after the effective date of the determination.

History—Added by Stats. 1994, Ch. 912 (SB 840), in effect September 28, 1994. Stats. 2022, Ch. 474 (SB 1496), in effect January 1, 2023, substituted "department" for "board" throughout; and substituted "department’s" for "board’s proposed" after "fifty thousand dollars ($50,000), the" and substituted "after" for "prior to" after "10 days" in the second paragraph.