Could a purchaser provide an exemption certificate retroactively to support a retailer's refund of tax from earlier sales?

Plain-English summary

California said an exemption certificate could not be filed retroactively. A retailer needed to receive the certificate timely to claim the exemption on its sales and use tax return.

That did not prevent a refund of tax actually overpaid to the state. The retailer could file one written refund claim stating the specific grounds and support the overpayment with the factual record rather than refiling twelve quarterly returns. The official annotation states that the retailer also had to refund the recovered amount to its customer.

Common questions

Could the purchaser cure earlier sales with a retroactive certificate?

No.

Did that eliminate every refund path?

No. The retailer could prove that tax was actually overpaid.

Did the retailer need to amend each quarterly return?

No. The source directed it to submit one written refund claim.

Citations and references

• California Revenue and Taxation Code § 6904
• Corporation controller's June 7, 1996 letter — refund facts, return question, and certificate question described or quoted; full letter not reproduced in the official PDF
• Customer's $4,869.43 refund request for sales-tax amounts paid from April 6, 1993 through February 26, 1996, twelve referenced quarterly returns, contemplated exemption certificate, and supporting factual record — facts and possible records described; underlying request, returns, certificate, sales, payments, and support not reproduced in the official PDF
• Official Annotation 222.0725 collection-page digest — adds timely good-faith receipt and customer-refund conditions not stated in the supporting opinion PDF
• Potential July 31, 1996 refund claim, agency review, retailer refund, customer repayment, denial, appeal, or other outcome after the advice — no follow-up or final outcome supplied in the official PDF or collection-page digest

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/222-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/222-0725.pdf

Original ruling text

222.0725

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

JOHAN KLEHS
First District, Hayward

LEGAL DIVISION – MIC: 85
450 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082
TELEPHONE (916) 324-2653
FAX (916) 324-2618

DEAN ANDAL
Second District, Stockton
ERNEST J. DRONENBURG, JR.
Third District, San Diego
BRAD SHERMAN
Fourth District, Los Angeles

June 11, 1996

KATHLEEN CONNELL
Controller, Sacramento

Ms. C--- A. D--Controller
C--- Corporation
XXXX --- Court
---, CA XXXXX

E. L. SORENSEN, JR
Executive Director

Re:

SR CHA XX-XXXXXX

Dear Ms. D---:
This is in response to your letter of June 7, 1996. We understand that one of your customers, A--- M--- C--- Corporation, has requested a refund from you of $4,869.43, for sales tax amounts paid to you for the period 4/6/93 to 2/26/96. It is your impression that you must refile 12 quarterly returns. You ask, “Can a company file an exemption certificate retroactively?” You need not file 12 quarterly returns. Revenue and Taxation Code section 6904 provides that every claim for refund shall be in writing and shall note the specific grounds on which the claim is founded. You should submit on claim for refund to this agency by July 31, 1996, to cover the second quarter of 1993. Exemption certificates may not be filed retroactively. That is, an exemption certificate must be timely filed with a retailer in order for the retailer to claim an exemption on its sales and use tax return. However, amounts of sales tax which are in fact overpaid to the State are subject to refund to the retailer, based upon the supporting factual record. Very truly yours

Gary J. Jugum
Assistant Chief Counsel
GJJ:sr
cc:

Oakland District Administrator – CH