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Business Taxes Law Guide—Revision 2024

BTLG Table of Contents > Use Fuel Tax Law > Chapter 6 > entire chapter

Use Fuel Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 3. Use Fuel Tax

Chapter 6. Overpayments and Refunds.


Article 1. Claim for Refund

Article 2. Suit for Refund

Article 2.5. Recovery of Erroneous Refunds

Article 3. Cancellations

Chapter 6. Overpayments and Refunds.

Article 1. Claim for Refund

9151. Overpayments; credits and refunds. If the department determines that any amount not required to be paid under this part has been paid by any person, 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 that person under this part.

Any overpayment of the tax by a user to a vendor who is required to collect the tax and who gives the user a receipt therefor pursuant to Section 8732 shall be credited or refunded by the state to the user.

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. 1943, p. 2002, in effect August 4, 1943, added provision authorizing credit of overpayments against amounts due under Part 2 of Division 2 of the code. Stats. 1945, p. 1439, in effect September 15, 1945, deleted this provision and added "the excess was." Stats. 1953, p. 3598, effective September 9, 1953, added "or from whom it was collected" at end of first sentence, added "amount paid or collected" after "excess" in second sentence and added the present third paragraph. Stats. 1957, p. 3774, in effect September 11, 1957, added second paragraph. Stats. 1957, p. 3228, approved by the Governor prior to p. 3774, would also have amended this section. Stats. 1959, p. 4378, in effect September 18, 1959, substituted "one-hundred" for "twenty-five" dollars. Stats. 1963, p. 3107, in effect September 20, 1963, added in the first paragraph "from whom the excess amount was collected or by whom it was paid under this part, and the balance shall either be … or, if authorized by the board, deducted by the person from any amounts to become due from him under this part," and in the second paragraph substituted "two hundred fifty" for "one hundred" dollars. Stats. 1965, p. 2053, in effect September 17, 1965, substituted "one thousand dollars ($1,000)" for "two hundred fifty dollars ($250)." Stats. 1977, Ch. 921, operative January 1, 1978, substituted "five thousand dollars ($5,000)" for "one thousand dollars ($1,000)" in the second paragraph. Stats. 1985, Ch. 591, effective January 1, 1986, substituted "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" in the second paragraph. Stats. 1988, Ch. 1029, in effect January 1, 1989, substituted "fifty thousand dollars ($50,000)" for "fifteen thousand dollars ($15,000)" following "an amount not exceeding" and added "or her" following "his" in the second paragraph. Stats. 1991, Ch. 770, in effect January 1, 1992, added "or wholesaler" after "vendor" in the third paragraph. Stats. 1994, Ch. 726, in effect September 22, 1994, deleted "to the State Board of Control" after "records and certify"; substituted "The" for "If the State Board of Control approves, the" at the beginning of the second sentence; added "or her" after "or his" and "due from him" in the second sentence; deleted the second paragraph which read: "In the case, however, of a determination by the board that an amount not exceeding fifty thousand dollars ($50,000) was not required to be paid under this part, the board without obtaining the approval of the State Board of Control may credit the amount on any amount then due and payable under this part from the person by whom the amount was paid and may refund the balance to the person or his or her successors, administrators, or executors." Stats. 1994, Ch. 912, in effect September 28, 1994, but operative July 1, 1995, deleted "or wholesaler" after "to a vendor" in the second paragraph, and added "For any amount … of the determination" as the third 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 "refunded to the person, or" and substituted "that person" for "him or her" after "become due from" in the second sentence of the first paragraph; 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 third paragraph.

9151.5. 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 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.

9152. Claims; limitation period. (a) Except as provided in subdivision (b) no refund 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 8776), Article 3 (commencing with Section 8801), or Article 4 (commencing with Section 8826) of Chapter 4, after six months from the date the determinations became final, or after six months from the date of overpayment, whichever period expires 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 that 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 8783.

(b) A refund may be approved by the board for any period for which a waiver is given under Section 8783 if a claim therefor is filed with the board before the expiration of the period agreed upon.

History—Stats. 1957, p. 3774, in effect September 11, 1957, completely revised this section. Stats. 1965, p. 4441, in effect September 17, 1965, revised section to provide for refund under certain circumstances. Stats. 1967, p. 1381, operative December 1, 1967, substituted "last" for "25th" day. Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "last" before "day" in the first sentence of subdivision (a). Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "last day of the month following the reporting period" for "25th day of the month following the month" after "years from the", substituted "(commencing with Section … of Chapter 4" for "3 or 4 of Chapter 4 of this part" after "under Article 2", deleted "the" after "whichever period expires", and substituted "that" for "such" after "the board within" in the first sentence of, and substituted "that" for "such" after "the expiration of" and after "the board within" in the second sentence of, subdivision (a).

9152.1. Claim limitation; financially disabled. (a) The limitation period specified in Section 9152 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, in effect January 1, 2001.

9152.2. Overpayments from levies or liens. Notwithstanding Section 9152, 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.

9152.3. Refund claim where tax has not been paid in full; timely filing. (a) A claim for refund that is otherwise valid under Sections 9152 and 9153 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 8776), Article 3 (commencing with Section 8801), or Article 4 (commencing with Section 8826) of Chapter 4.

(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.

9153. Claims; form and content. The claim shall be in writing and shall state the specific grounds upon which it is founded.

9154. Credit for overpayments not exceeding fifty thousand dollars. [Repealed by Stats. 1996, Ch. 1087, in effect January 1, 1997.]

9155. Interest on overpayment. 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 was made. In addition, a refund or credit shall be made of any interest imposed upon the person making the overpayment 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—Added by Stats. 1963, p. 4383, in effect September 20, 1963. 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 … month" before "from" in the first sentence. Stats. 1983, Ch. 1102, in effect September 27, 1983, operative November 1, 1983, substituted "25th" for "last" before "day" in the first sentence of the first paragraph and in subdivision (a). Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, substituted "modified … per month" for "adjusted annual rate" before "established" in first paragraph, substituted "he or she" for "he" in (a). Stats. 1992, Ch. 1336, in effect January 1, 1993, substituted "26th" for "25th" after "from the", substituted "during" for "for" after "period", and substituted ". In addition, a" for "; but no" in the first sentence; and added "as follows" after "paid" in the second paragraph. Stats. 1995, Ch. 555, in effect January 1, 1996, substituted "first day of the calendar" for "26th day of the" after "6591.5 from the" in the first paragraph; and substituted "last day of the calendar" for "25th day of the" after "refund, to the" in subdivision (a).

9156. Intentional or careless overpayment. (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—Added by Stats. 1963, p. 4384, in effect September 20, 1963. Stats. 1998, Ch. 420 (SB 2230), in effect January 1, 1999, added subdivision designation "(a)" and added subdivision (b).

9157. Systems meeting emission standards. [Repealed by Stats. 1977, Ch. 579, effective January 1, 1978.]

Article 2. Suit for Refund

9171. Injunction 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 excise 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 excise tax or other amounts required to be paid.

9172. Necessity for 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.

History—Stats. 1957, p. 3775, in effect September 11, 1957, completely revised this section which previously had provided for a suit in Sacramento County after payment.

9173. 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.

History—Stats. 1949, p. 1342, in effect October 1, 1949, revised wording without substantive change. Stats. 1957, p. 3775, in effect September 11, 1957, completely revised this section which previously contained a limitation period of one year.

9173.5. When refund claim not acted upon. 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.

History—Added by Stats. 1957, p. 3775, in effect September 11, 1957.

9173.6. 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 overpayments.

History—Added by Stats. 1957, p. 3775, in effect September 11, 1957.

9174. Credit or refund; interest. 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 31 (commencing with Section 60001), and the balance of the judgment shall be refunded to the plaintiff. 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 of the amount 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.

History—Stats. 1943, p. 2002, in effect August 4, 1943, added "and Part 2 of Division 2 of this code." Stats. 1975, Ch. 661, operative to interest accruing on or after January 1, 1976, substituted "12 percent" for "6 percent." Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "(commencing … division)" for "of Division … code" after "Part 2" in the first sentence, and substituted "adjusted … 19269" for "rate … annum" before "upon" in the second sentence. Stats. 1984, Ch. 1020, effective January 1, 1985, operative July 1, 1985, deleted "of this division" after "Section 7301)," substituted "modified … per annum" for "adjusted annual rate" before "established," substituted "Section 6591.5" for "Section 19269." Stats. 1995, Ch. 555, in effect January 1, 1996, added a comma after "under this part" and added "Part 31 (commencing with Section 60001), and" after "Section 7301), and" in the first sentence.

9175. 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 user.

Article 2.5. Recovery of Erroneous Refunds

9181. 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 2 (commencing with Section 8776) or Article 4 (commencing with Section 8826) of Chapter 4. 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—Added by Stats. 1957, p. 3775, in effect September 11, 1957. Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, added subdivision designation "(a)", substituted "that" for "which" after "or part thereof" in subdivision (a), and added 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.

9182. Place of trial. In any action brought pursuant to subdivision (a) of Section 9181, the court may, with the consent of the Attorney General, order a change in the place of trial.

History—Added by Stats. 1957, p. 3775, in effect September 11, 1957. Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, substituted "In any action … change in the" for "The action shall be tried in the County of Sacramento unless the court, with the consent of the Attorney General orders a change of".

9183. Rules of procedure, etc. The Attorney General shall prosecute any action brought pursuant to subdivision (a) of Section 9181, and the provisions of the Code of Civil Procedure relating to service of summons, pleadings, proofs, trials and appeals shall apply to the proceedings.

History—Added by Stats 1957, p. 3775, in effect September 11, 1957. Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, substituted "any action brought … of Section 9181," for "the action" after "General shall prosecute" and substituted "shall apply" for "are applicable" after " trials and appeals".

9184. 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 9181, 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 9181 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 3. Cancellations

9196. 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, certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made and authorize the cancellation of the amount upon the records of the department. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

History—Stats. 1959, p. 4379, in effect September 18, 1959, completely revised the section which previously had required certification to the State Board of Control irrespective of the amount. Stats. 1963, p. 3108, in effect September 20, 1963, added "set forth that fact in its records and" in the first sentence, and changed "one hundred" to "two hundred fifty" dollars in the first and last sentences. Stats. 1965, p. 2054, in effect September 17, 1965, substituted "one thousand dollars ($1,000)" for "two hundred fifty dollars ($250)" in the first and last sentences. Stats. 1984, Ch. 1707, effective January 1, 1985, substituted "five thousand dollars ($5,000)" for each "one thousand dollars ($1,000)" reference. Stats. 1985, Ch. 591, effective January 1, 1986, substituted "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" after "in excess of" and "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" after "not exceeding." Stats. 1988, Ch. 1029, in effect January 1, 1989, substituted "fifty thousand dollars ($50,000)" for "fifteen thousand dollars ($15,000)" before "has been illegally determined" in the first and last sentences. Stats. 1994, Ch. 726, in effect September 22, 1994, deleted "in excess of fifty thousand dollars ($50,000)" after "If any amount"; substituted a comma for "and" after "in its records"; deleted "to the State Board of Control" after "certify"; substituted ", and" for ". If the State Board of Control approves, it shall" after "determination was made"; and substituted "Any proposed determination … of that determination" for "If an amount not exceeding fifty thousand dollars ($50,000) has been illegally determined either by the person filing a return or by the board the board without certifying this fact to the State Board of Control shall authorize the cancellation of the amount upon the records of the board." Stats. 2022, Ch. 474 (SB 1496), in effect January 1, 2023, substituted "department" for "board" throughout; deleted "proposed" after "Any" and substituted "after" for "prior to" after "10 days" in the second sentence.