Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales And Use Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 5. Determinations

Article 2. Deficiency Determinations

Section 6481

6481. Deficiency determination. If the board is not satisfied with the return or returns of the tax or the amount of tax, or other amount, required to be paid to the state by any person, it may compute and determine the amount required to be paid upon the basis of the facts contained in the return or returns or upon the basis of any information within its possession or that may come into its possession. One or more deficiency determinations may be made of the amount due for one or for more than one period. When a business is discontinued a determination may be made at any time thereafter, within the periods specified in Section 6487, as to liability arising out of that business, irrespective of whether the determination is issued prior to the due date of the liability as otherwise specified in this part.

History—Stats. 1949, p. 1167, operative July 1, 1949, added last sentence. Stats. 1984, Ch. 930, effective January 1, 1985, added "or other amount" before "required" in first sentence.

Nature of determination.—A determination hereunder does not create a new obligation or liability, but is merely a determination by the board of the amounts that a retailer has failed to pay. People v. Buckles (1943) 57 Cal.App.2d 76.

Determination based on estimate.—The board does not exceed its authority in establishing taxable receipts on the basis of cost of goods sold plus appropriate markups, since the Sales and Use Tax Law clearly contemplates an examination of the documents of original entry to ascertain whether the books and the sales tax returns reflect accurately the taxable transactions made by the taxpayer. Maganini v. Quinn (1950) 99 Cal.App.2d 1.

Consistency of Taxpayer's Books and Records Not Conclusive.—Even though a taxpayer's books and records are comprehensive and in agreement with each other, the Board is not required to accept such evidence as conclusive and may use recognized and standard accounting procedures to establish tax liability. Where the Board establishes a deficiency, the burden of proof is upon the taxpayer to explain any disparity between his books and records and the results of the Board's audit. Riley B's, Inc. v. State Board of Equalization (1976) 61 Cal.App.3d 610.