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Business Taxes Law Guide—Revision 2024
Motor Vehicle Fuel Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 2. Motor Vehicle Fuel Tax Law
Chapter 5. Determinations and Payments.
Article 7. Payments by Unlicensed Persons
Section 7727
7727. Immediate liability for backup tax. (a) The backup tax imposed under Section 7364 and any applicable penalties and interest shall be immediately due and payable.
The board shall forthwith ascertain as best it may the amount of motor vehicle fuel sold, or delivered into the fuel tank of a motor vehicle fuel-powered highway vehicle, or sold and delivered into the fuel tank of a motor vehicle fuel-powered highway vehicle, and shall determine immediately the tax on the amount and shall give the highway vehicle operator/fueler notice of this determination as prescribed by Section 7671. The determination shall include interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the last day of the month following the date the backup tax applies until the date of remittance to the state. The provisions of Sections 7699 and 7700 shall be applicable with respect to the finality of the determination and the right of the highway vehicle operator/fueler to petition for a redetermination.
(b) A penalty of 25 percent of the amount of tax or five hundred dollars ($500), whichever is greater, shall be added to the tax.
(c) If both the penalty specified in this section and in Section 7405 are otherwise applicable, only the penalty totaling the greatest amount shall be imposed, and, the penalty specified in this section shall be imposed only if the amount of penalty exceeds any other applicable penalty.
(d) Where the board determines that the sale, delivery into the fuel tank of a motor vehicle fuel-powered highway vehicle, or sale and delivery into the fuel tank of a motor vehicle fuel-powered highway vehicle of untaxed motor vehicle fuel was due to reasonable cause and circumstances beyond the person's control, may be relieved of the penalty. 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 request for relief is based.
(e) All administrative provisions contained in this part that apply to a supplier shall also be applicable to a highway vehicle operator/fueler.