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Business Taxes Law Guide—Revision 2024
Timber Yield Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 18.5. Timber Yield Tax
Chapter 7. Overpayments and Refunds
Article 1. Claim for Refund
- 38601 Credits and refunds
- 38602 Claim; limitation period
- 38602.5 Filing extension; disability
- 38603 Form and content of claim
- 38604 Effect of failure to file claim
- 38605 Notice of action on claim
- 38606 Interest
- 38607 Disallowance of interest; waiver
Article 2. Suit for Refund
- 38613 Action for refund; limitation
- 38614 When refund claim not acted upon
- 38615 Disposition of amount of judgment
- 38616 Interest
- 38617 Judgment for assignee forbidden
Article 3. Recovery of Erroneous Refunds
- 38621 Erroneous refunds; actions
- 38622 Place of trial
- 38623 Rules of procedure, etc
- 38624 Erroneous refund; interest relief
Article 4. Cancellations
Article 1. Claim for Refund
38601. Credits and refunds. If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid 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 be refunded to the person, or the person’s successors, administrators, or executors. 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. 1979, Ch. 516, in effect January 1, 1980, substituted "five" for "one" and "($5,000)" for "($1,000)" in the first sentence of 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, added "or her" after "his" in the first paragraph, substituted "fifty" for "fifteen" after "exceeding, substituted "50,000" for "15,000" after "dollars", and added "or her" after "his" in the second paragraph. Stats. 1994, Ch. 726, in effect September 22, 1994, substituted ", certify" for "and shall certify to the State Board of Control" after "records of the board", substituted ", and credit" for ". If approved by the State Board of Control" after "by whom paid" in the first sentence; added the second sentence; and 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 approval of the State Board of Control may credit the amount on any amounts 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 successors, administrators, or executors." Stats. 2022, Ch. 474 (SB 1496), in effect January 1, 2023, substituted "department" for "board" throughout the section; substituted "the person’s" for "his or her" before "successors" in the first sentence of the paragraph; deleted "proposed" before "determination" and substituted "after" for "prior to" before "the effective" in the second sentence of the paragraph.
38602. Claim; 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 close of the quarterly period for which the overpayment was made, or, with respect to determinations made under Article 2, 3 or 4 of Chapter 5 of this part, after six months from the date the determinations become 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 such period. No credit shall be approved by the board after the expiration of such period unless a claim for credit is filed with the board within such period, or unless the credit relates to a period for which a waiver is given pursuant to Section 38419.
(b) A refund may be approved by the board for any period for which a waiver is given under Section 38419 if a claim therefor is filed with the board before the expiration of the period agreed upon.
38602.5. Filing extension; disability. (a) The limitation period specified in Section 38602 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.
38603. Form and content of claim. Every claim shall be in writing and shall state the specific grounds upon which the claim is founded.
38604. Effect of failure to file claim. Failure to file a claim within the time prescribed in this article constitutes a waiver of any demand against the state on account of overpayment.
38605. Notice of action on claim. Within 30 days after disallowing any claim in whole or in part the board shall serve notice of its action on the claimant in the manner prescribed for service of notice of a deficiency determination.
38606. Interest. Interest shall be paid upon any overpayment of any amount of tax at the modified adjusted rate per month, or fraction thereof, as defined in Section 6591.5, from the last day of the calendar month following the quarterly period for which the overpayment was made; but no 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 the person has not already filed a claim, is notified by the department that a claim may be filed or the date upon which the claim is approved by the department, 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. 1982, Ch. 5 (First Extra Session), in effect June 1, 1982, substituted "adjusted annual rate established pursuant to Section 19269" for "rate of 1 percent per month" after "tax at the" in the first paragraph. Stats. 1996, Ch. 1087, in effect January 1, 1997, substituted "Section 19521" for "Section 19269" after "established pursuant to" in the first sentence; added "as follows" after "shall be paid", substituted "he or she" for "he" in subdivision (a). Stats. 2021, Ch. 432 (SB 824), in effect January 1, 2022, added "modified" after "tax at the", deleted "annual" after "adjusted", substituted "per month, or fraction thereof, as defined in" for "established pursuant to", and substituted "6591.5," for "19521" after "Section" in the first paragraph; substituted " the person" for "he or she" after "the overpayment, if" and substituted "department" for "board" in subdivision (a).
Note.—Section 89 of Stats. 1982, Ch. 5 (First Extra Session) provided that the provisions of this act shall apply to all interest and additions to tax accruing on or after the effective date of this act.
38607. Disallowance of interest; waiver. (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.
Article 2. Suit for Refund
38611. 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 any amount of tax required to be collected.
38612. 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 determined or collected unless a claim for refund or credit has been duly filed pursuant to Article 1 (commencing with Section 38601).
History—Stats. 1987, Ch. 498, in effect January 1, 1988, added "(commencing with Section 38601)" after "Article 1" in the first sentence.
38613. Action for refund; limitation. Within 90 days after the mailing of the notice of the board's action upon a claim filed pursuant to Article 1 (commencing with Section 38601), the claimant may bring an action against the board on the grounds set forth in the claim in a court of competent jurisdiction in any city or city and county of this state in which the Attorney General has an office for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.
Failure to bring action within the time specified constitutes a waiver of any demand against the state on account of alleged overpayments.
History—Stats. 1982, Ch. 454, in effect January 1, 1983, deleted "of this chapter" after "Article 1" in the first paragraph. Stats. 1987, Ch. 498, in effect January 1, 1988, added "(commencing with Section 38601)" after "Article 1" in the first sentence.
38614. 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 of its action on the claim, consider the claim disallowed and bring an action against the board on the grounds set forth in the claim for the recovery of the whole or any part of the amount claimed as an overpayment.
38615. Disposition of amount of judgment. If judgment is rendered for the plaintiff, the amount of the judgment shall first be credited on any timber yield tax or timber reserve fund tax due and payable from the plaintiff. The balance of the judgment shall be refunded to the plaintiff.
Attorney's Fees.—Indian tribe's challenge to application of tax to non-Indian purchasers of tribal timber fell outside scope of federal civil rights statute (42 U.S.C.A. Sec. 1983), and tribe was not entitled to attorney's fees as prevailing party (42 U.S.C.A. Sec. 1988). While right to tribal self-government qualified as substantial claim, it was protected by treaty and federal judicial decisions, not specifically grounded in a constitutional provision or federal statute. Hoopa Valley Tribe v. Nevins, 881 F.2d 657.
38616. Interest. In any judgment, interest shall be allowed at the modified adjusted rate per month, or fraction thereof, as defined in 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 California Department of Tax and Fee Administration.
History—Stats. 1982, Ch. 5 (First Extra Session), in effect June 1, 1982, substituted "adjusted annual rate established pursuant to Section 19269" for "rate of 12 percent per annum" after "allowed at the". Stats. 1996, Ch. 1087, in effect January 1, 1997, substituted "Section 19521" for "Section 19269" after "established pursuant to". Stats. 2021, Ch. 432 (SB 824), in effect January 1, 2022, added "modified" after "allowed at the", deleted "annual" after "adjusted", substituted "per month, or fraction thereof, as defined in" for "established pursuant to" after "rate", and substituted "6591.5," for "19521" after "Section", and substituted "California Department of Tax and Fee Administration" for "board".
Note.—Section 89 of Stats. 1982, Ch. 5 (First Extra Session) provided that the provisions of this act shall apply to all interest and additions to tax accruing on or after the effective date of this act.
Article 3. Recovery of Erroneous Refunds
38621. Erroneous refunds; actions. (a) The Controller 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 pursuant to this part. In recovering any erroneous refunds or credits, the board, in its discretion, may issue a deficiency determination in accordance with Article 2 (commencing with Section 38411) or Article 4 (commencing with Section 38431) of Chapter 5. Except in the case of fraud, the determination shall be made within three years from the date of the Controller's warrant or date of credit.
History—Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000, added subdivision letter designation (a) before first paragraph, and substituted "that" for "which" after "or part thereof" twice therein; and added subdivision (b).
38622. Place of trial. The action shall be tried in the County of Sacramento unless the court with the consent of the Attorney General orders a change of place of trial.
38623. Rules of procedure, etc. The Attorney General shall prosecute the action, and the provisions of the Code of Civil Procedure relating to service of summons, pleadings, proofs, trials, and appeals are applicable to the proceedings.
38624. Erroneous refund; interest relief. (a) Notwithstanding any other provision of this part, if the board 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 38621, no interest shall be imposed on the amount of that erroneous refund until 30 days after the date on which the board mails 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 38621 on or after January 1, 2000.
History—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000.
Article 4. Cancellations
38631. Cancellation of determinations. 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. 1981, Ch. 947, in effect January 1, 1982, substituted "five thousand dollars ($5,000)" for "one thousand dollars ($1,000)" after "excess of" in the first sentence and after "exceeding" in the third sentence. Stats. 1985, Ch. 591, effective January 1, 1986, substituted "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" in first and third sentences. Stats. 1988, Ch. 1029, in effect January 1, 1989, substituted "fifty" for "fifteen" and substituted "50,000" for "15,000" in the first and third sentences. Stats. 1994, Ch. 726, in effect September 22, 1994, added commas after "records" and "was made"; substituted ", certify" for "and certify to the State Board of Control" after "in its records", substituted ", and" for ". If the State Board of Control approves, it shall" after "determination was made" in the first sentence; deleted former third sentence which read, "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." and added new third sentence. Stats. 1999, Ch. 941 (SB 1231), in effect January 1, 2000, deleted "in excess of fifty thousand dollars ($50,000)" after "If any amount" in the first sentence. Stats. 2022, Ch. 474 (SB 1496), in effect January 1, 2023, substituted "department" for "board" throughout the section; deleted "proposed" before "determination" and substituted "after" for "prior to" before "the effective" in the second sentence of the paragraph.