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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 5. Redeterminations
Section 6563
6563. Decrease or increase of determination. (a) 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 Unless the penalty imposed by Section 6485 or Section 6514 applies to the amount of the determination as originally made or as increased, the claim for increase must be asserted during one of the following applicable periods:
(1) In the case of any taxpayer whose reported gross receipts and total sales price of property sold or purchased by him or her is less than ten million dollars ($10,000,000) in each calendar quarter of the period or periods to which the determination applies, within three years after the first deficiency determination or within three years after the time tax records requested by the board were made available, whichever is later.
(2) In the case of any other taxpayer, within eight years after the first deficiency determination or within eight years after the time tax records requested by the board were made available, whichever is later.
(b) If the taxpayer and the board mutually agree, the time limits specified in subdivision (a) may be waived.
(c) The board shall specify the information on which it bases its increase.
History—Stats. 1945, p. 1725, operative July 1, 1945, added "before it becomes final." Stats. 1969, p. 893, in effect November 10, 1969, added the second sentence. Stats. 1984, Ch. 1728, effective January 1, 1985, deleted "within … asserted" after "must be asserted," added "during … periods" and paragraphs (1) and (2) and subdivisions (b) and (c) after "must be asserted," added "(a)" designation at beginning of section.
Note.—Sec. 3, Stats. 1984, Ch. 1728 provided (a) The Legislative Analyst shall investigate and report to the Legislature no later than January 1, 1986, on each of the following:
(1) If there are feasible cost-effective methods for the State Board of Equalization to obtain, file, and retrieve information regarding the types of specific transactions reported by taxpayers and the types of transactions covered by an audit by the board's staff. The information so obtained, filed, and retrieved would be for later use in administrative or court proceedings in determining, with respect to any taxpayer's activity or transaction, whether or not other taxpayers have paid sales or use tax on the same activity or transaction and whether or not the board has applied tax to other taxpayers engaged in the same activity or transaction.
(2) In what manner the information so obtained from other taxpayers should be disclosed, in order to protect to the greatest possible extent the confidentiality of the information.
(3) If it is feasible to provide by statute that a new product not previously marketed in California is not subject to tax unless the new product is specifically described in board regulations as subject to tax.
(b) Notwithstanding the provisions of Section 7056 of the Revenue and Taxation Code and Title 1.8 (commencing with Section 1798) of Part 4 of Division 3 of the Civil Code, the board shall make available to the Legislative Analyst any confidential taxpayer accounts and audits requested by the Legislative Analyst in order to complete the required investigation and report. The Legislative Analyst shall maintain the confidentiality of any taxpayer accounts and audits provided by the board. Sec. 4 provided it is the intent of the Legislature that the State Board of Equalization shall explore and use every available means of regularly informing California businesses of the provisions of Section 6596 of the Revenue and Taxation Code.