2005 California Revenue and Taxation Code Sections 6480-6480.9 Distributions

6480.  (a) For purposes of the imposition of the prepayment of sales
tax on motor vehicle fuel or aircraft jet fuel pursuant to this
article, the terms "aircraft jet fuel," "aircraft jet fuel dealer,"
"aviation gasoline," "entry," "in this state," "motor vehicle fuel,"
"person," "removal," "sale," and "supplier" are defined pursuant to
Part 2 (commencing with Section 7301), except as provided in
subdivision (b).
   (b) For purposes of this article, "motor vehicle fuel" does not
include aviation gasoline for use in propelling aircraft.
   (c) For purposes of the imposition of the prepayment of sales tax
on diesel fuel pursuant to this article, the terms "diesel fuel,"
"entry," "in this state," "removal," "person," and "supplier," are
defined pursuant to Part 31 (commencing with Section 60001).
   (d) "Wholesaler" includes every person other than a supplier,
dealing in motor vehicle fuel, aircraft jet fuel, or diesel fuel.
"Wholesaler" does not include anyone dealing in motor vehicle fuel or
diesel fuel in the capacity of an operator of a service station.
"Wholesaler" does not include anyone dealing in aircraft jet fuel in
the capacity of an aircraft jet fuel dealer.
   (e) With respect to diesel fuel and aircraft jet fuel, "sale"
means:
   (1) The transfer of title or possession, exchange, or barter,
conditional or otherwise, in any manner or by any means whatsoever,
of aircraft jet fuel or diesel fuel (other than aircraft jet fuel or
diesel fuel in a terminal) to a purchaser for a consideration.
   (2) The transfer of the inventory position in the aircraft jet
fuel or diesel fuel in a terminal if the purchaser becomes the
positionholder with respect to the taxable fuel.
   (f) For purposes of this article, aircraft jet fuel will be
subject to the prepayment of sales tax at such time and in such
manner as if it were subject to diesel fuel tax under the Diesel Fuel
Tax Law in Part 31 (commencing with Section  60001), except that in
the case of bulk transfers, aircraft jet fuel is not subject to the
prepayment of sales tax as to the removal of diesel fuel in this
state from any refinery as described in paragraph (1) of subdivision
(a) of Section 60052, the entry of diesel fuel into this state as
described in paragraph (1) of subdivision (b) of Section 60052, or
the removal of diesel fuel in this state as described in subdivision
(c) of Section 60052.
6480.1.  (a) At any time that motor vehicle fuel tax or diesel fuel
tax is imposed or would be imposed, but for the dyed diesel fuel
exemption in paragraph (1) of subdivision (a) of Section 60100, or
the train operator exemption in paragraph (7) of subdivision (a) of
Section 60100 or paragraph (11) of subdivision (a) of Section 7401,
or, pursuant to subdivision (f) of Section 6480, would be deemed to
be imposed, on any removal, entry, or sale in this state of motor
vehicle fuel, aircraft jet fuel, or diesel fuel, the supplier shall
collect prepayment of retail sales tax from the person to whom the
motor vehicle fuel, aircraft jet fuel, or diesel fuel is sold.
However, if no sale occurs at the time of imposition of motor vehicle
fuel tax or diesel fuel tax, the supplier shall prepay the retail
sales tax on that motor vehicle fuel, aircraft jet fuel, or diesel
fuel.  The prepayment required to be collected by the supplier
constitutes a debt owed by the supplier to this state until paid to
the board, until satisfactory proof has been submitted to prove that
the retailer of the fuel has paid the retail sales tax to the board,
or until a supplier or wholesaler who has consumed the fuel has paid
the use tax to the board.  Each supplier shall report and pay the
prepayment amounts to the board, in a form as prescribed by the
board, in the period in which the fuel is sold.  On each subsequent
sale of that fuel, each seller, other than the retailer, shall
collect from his or her purchaser a prepayment computed using the
rate applicable at the time of sale.  Each supplier shall provide his
or her purchaser with an invoice for, or other evidence of, the
collection of the prepayment amounts which shall be separately stated
thereon.
   (b) (1) A wholesaler shall collect prepayment of the retail sales
tax from the person to whom the motor vehicle fuel, aircraft jet
fuel, or diesel fuel is sold.  Each wholesaler shall provide his or
her purchaser with an invoice for or other evidence of the collection
of the prepayment amounts, which shall be separately stated thereon.
   (2) Each wholesaler shall report to the board, in a form as
prescribed by the board and for the period in which the motor vehicle
fuel, aircraft jet fuel, or diesel fuel was sold, all of the
following:
   (A) The number of gallons of fuel sold and the amount of sales tax
prepayments collected by the wholesaler.
   (B) The number of tax-paid gallons purchased and the amount of
sales tax prepayments made by the wholesaler.
   (C) In the event that the amount of sales tax prepayments
collected by the wholesaler is greater than the amount of sales tax
prepayments made by the wholesaler, then the excess constitutes a
debt owed by the wholesaler to the state until paid to the board, or
until satisfactory proof has been submitted that the retailer of the
fuel has paid the tax to the board.
   (c) A supplier or wholesaler who pays the prepayment and issues a
resale certificate to the seller, but subsequently consumes the motor
vehicle fuel, aircraft jet fuel, or diesel fuel, shall be entitled
to a credit against his or her sales and use taxes due and payable
for the period in which the prepayment was made, provided that he or
she reports and pays the use tax to the board on the consumption of
that fuel.
   (d) The amount of a prepayment paid by the retailer or a supplier
or wholesaler who has consumed the motor vehicle fuel, aircraft jet
fuel, or diesel fuel to the seller from whom he or she acquired the
fuel shall constitute a credit against his or her sales and use taxes
due and payable for the period in which the sale was made.  Failure
of the supplier or wholesaler to report prepayments or the supplier's
or wholesaler's failure to comply with any other duty under this
article shall not constitute grounds for denial of the credit to the
retailer, supplier, or wholesaler, either on a temporary or permanent
basis or otherwise.  To be entitled to the credit, the retailer,
supplier, or wholesaler shall retain for inspection by the board any
receipts, invoices, or other documents showing the amount of sales
tax prepaid to his or her supplier, together with the evidence of
payment.
   (e) The rate of the prepayment required to be collected during the
period from July 1, 1986, through March 31, 1987, shall be four
cents ($0.04) per gallon of motor vehicle fuel distributed or
transferred.
   (f) On April 1 of each succeeding year, the prepayment rate per
gallon for motor vehicle fuel, rounded to the nearest one-half of one
cent ($0.005), of the required prepayment shall be established by
the board based upon 80 percent of the combined state and local sales
tax rate established by Sections 6051, 6051.2, 6051.3, 6051.5, 7202,
and 7203.1, and Section 35 of Article XIII of the California
Constitution on the arithmetic average selling price (excluding sales
tax) as determined by the State Energy Resources Conservation and
Development Commission, in its latest publication of the "Quarterly
Oil Report," of all grades of gasoline sold through a self-service
gasoline station.  In the event the "Quarterly Oil Report" is delayed
or discontinued, the board may base its determination on other
sources of the arithmetic average selling price of gasoline.  The
board shall make its determination of the rate no later than November
1 of the year prior to the effective date of the new rate.
Immediately upon making its determination and setting of the rate,
the board shall each year, no later than January 1, notify by mail
every supplier, wholesaler, and retailer of motor vehicle fuel.  In
the event the price of fuel decreases or increases, and the
established rate results in prepayments which consistently exceed or
are significantly lower than the retailers' sales tax liability, the
board may readjust the rate.
   (g) On April 1 of each succeeding year, the prepayment rate per
gallon for aircraft jet fuel, rounded to the nearest one-half of one
cent ($0.005), shall be established by the board based upon 80
percent of the combined state and local sales tax rate established by
Sections 6051, 6051.2, 6051.3, 6051.5, 7202, and 7203.1, and Section
35 of Article XIII of the California Constitution on the arithmetic
average selling price (excluding sales and state excise tax) as
determined by the board.  The board shall make its determination of
the rate no later than November 1 of the year prior to the effective
date of the new rate.  The rate of the prepayment required to be
collected for aircraft jet fuel shall be equal to 80 percent of the
arithmetic average selling price of aircraft jet fuel as specified by
industry publications.  Immediately upon making its determination
and setting of the rate, the board shall each year, no later than
January 1, notify by mail every supplier, wholesaler, and retailer of
aircraft jet fuel.  In the event the price of aircraft jet fuel
decreases or increases, and the established rate results in
prepayments that consistently exceed or are significantly lower than
the retailers' sales tax liability, the board may readjust the rate.
   (h) On April 1 of each succeeding year, the prepayment rate per
gallon for diesel fuel, rounded to the nearest one-half of one cent
($0.005), shall be established by the board based upon 80 percent of
the combined state and local sales tax rate established by Sections
6051, 6051.2, 6051.3, 6051.5, 7202, and 7203.1, and Section 35 of
Article XIII of the California Constitution on the arithmetic average
selling price (excluding sales and state excise tax) as determined
by the board.  The board shall make its determination of the rate no
later than November 1 of the year prior to the effective date of the
new rate.  The rate of the prepayment required to be collected for
diesel fuel shall be equal to 80 percent of the arithmetic average
selling price of diesel fuel as specified by industry publications.
Immediately upon making its determination and setting of the rate,
the board shall each year, no later than January 1, notify by mail
every supplier, wholesaler, and retailer of diesel fuel.  In the
event the price of diesel fuel decreases or increases, and the
established rate results in prepayments that consistently exceed or
are significantly lower than the retailers' sales tax liability, the
board may readjust the rate.
   (i) (1) Notwithstanding any other provision of this section, motor
vehicle fuel sold by a supplier or wholesaler to a qualified
purchaser who, pursuant to a contract with the State of California or
its instrumentalities, resells that fuel to the State of California
or its instrumentalities shall be exempt from the prepayment
requirements.
   (2) A qualified purchaser who acquires motor vehicle fuel for
subsequent resale to the State of California or its instrumentalities
pursuant to this subdivision shall furnish to the supplier or
wholesaler from whom the fuel is acquired an exemption certificate,
completed in accordance with any instructions or regulations as the
board may prescribe.  The supplier or wholesaler shall retain the
certificate in his or her records in support of the exemption.  To
qualify for the prepayment exemption, both of the following
conditions shall apply:
   (A) The qualified purchaser does not take possession of the fuel
at any time.
   (B) The fuel is delivered into storage tanks owned or leased by
the State of California or its instrumentalities via facilities of
the supplier or wholesaler, or by common or contract carriers under
contract with the supplier or wholesaler.
   (3) For purposes of this subdivision, "qualified purchaser" means
a wholesaler who does not have or maintain a storage facility or
facilities for the purpose of selling motor vehicle fuel.
6480.2.  (a) If the board determines that it is necessary for the
efficient administration of this part, the board may require a
supplier or wholesaler to provide the board with a list of purchasers
to whom the motor vehicle fuel, aircraft jet fuel, or diesel fuel
was sold.
   (b) In addition to any other reports required under this article,
the board may, by rule and otherwise, require additional, other, or
supplemental reports, in any form which the board may require, from
suppliers or wholesalers with respect to their sales of motor vehicle
fuel, aircraft jet fuel, or diesel fuel.
   (c) Any supplier or wholesaler who fails to comply with this
section is guilty of a misdemeanor punishable as provided in Section
7153.
6480.3.  The supplier or wholesaler shall file his or her prepayment
form together with a remittance of the prepayment amounts, if any,
required to be collected pursuant to Section 6480.1 payable to the
State Board of Equalization, on or before the last day of the month
following the monthly period to which the prepayment form or each
prepayment relates.
6480.4.  (a) Any supplier or wholesaler who fails to make a timely
remittance to the board of the prepayment amounts, if any, required
pursuant to Sections 6480.1 and 6480.3 shall also pay a penalty of 10
percent of the amount of the prepayment due but not paid, plus
interest at the modified adjusted rate per month, or fraction
thereof, established pursuant to Section 6591.5, from the date the
prepayment became due and payable to the state until the date of
payment.
   (b) The penalty amount specified in subdivision (a) shall be 25
percent if the supplier or wholesaler knowingly or intentionally
fails to make a timely remittance.
6480.6.  (a) The following persons who have paid prepayment amounts
either directly to the board or to the person from whom the motor
vehicle fuel, aircraft jet fuel, or diesel fuel was purchased shall
be refunded those amounts:
   (1) Any person who exports the fuel for subsequent sale outside
this state.
   (2) Any person who sells the fuel which is exempt from the sales
or use tax pursuant to Sections 6352, 6357, 6381, and 6396.
   (3) Any person who has lost the fuel through fire, flood, theft,
leakage, evaporation, shrinkage, spillage, or accident, prior to any
retail sale.
   (4) Any supplier who has removed fuel from an approved terminal at
the terminal rack, but only to the extent that the supplier can show
that tax on the same amount of fuel has been paid more than one time
by the same supplier.
   (5) Any person who is unable to collect the prepayment from the
purchaser insofar as the sales of the fuel are represented by
accounts which have been found to be worthless and charged off for
income tax purposes, or, if the person is not required to file income
tax returns, accounts which have been charged off in accordance with
generally accepted accounting principles.  If partial payments have
been made, the payments shall be prorated between amounts due for
fuel and amounts due for the related prepayment.  If any of those
accounts are thereafter in whole or in part collected by the seller,
the gallons of fuel represented by the amounts collected shall be
included in the first return filed after that collection and the
amount of the prepayment thereon paid with the return.
   (b) In lieu of a refund, the board may authorize a credit to be
taken by the person to whom the refund is due upon his or her
prepayment form or sales and use tax return.
6480.7.  (a) The board may require any supplier or wholesaler
subject to this article to place with the board any security that the
board determines is necessary to ensure compliance with this
article.  The amount of the security shall be fixed by the board but
shall not be greater than three times the estimated average liability
of suppliers or wholesalers required to file returns for monthly
periods, determined in any manner that the board deems proper, or
five hundred thousand dollars ($500,000), whichever amount is less.
These amounts apply regardless of the type of security placed with
the board.  The amount of the security may be increased or decreased
by the board subject to the maximum amounts.  The security required
pursuant to this section is in addition to the bond or bonds required
pursuant to Section 7486.
   (b) The board may sell the security at public auction if it
becomes necessary to so do in order to recover any tax or any amount
required to be collected or penalty due.  Notice of the sale may be
served upon the person who placed the security personally or by mail.
  If service is by mail, service shall be made in the manner
prescribed for service of a notice of a deficiency determination and
shall be addressed to the person at his or her address as it appears
in the records of the board.  However, security in the form of a
bearer bond issued by the United States or the State of California
which has a prevailing market price may be sold by the board at a
private sale at a price not lower than the prevailing market price
thereof.  Upon any sale, any surplus above the amounts due shall be
returned to the supplier or wholesaler who placed the security.
6480.9.  (a) A person qualified under subdivision (b) may issue a
certificate to a seller with respect to the amount of sales tax
required to be prepaid pursuant to Section 6480.1 when purchasing
diesel fuel from the seller.  The certificate shall be completed in
accordance with any instructions or regulations as the board may
prescribe, and shall clearly specify that the person will purchase
the volume of diesel fuel that the person reasonably expects he or
she will sell that qualifies for the exemption under Section 6357.1.
A seller that receives a properly completed certificate from a
person qualified under subdivision (b) shall not be required to
collect the prepayment of the retail sales tax otherwise required in
Section 6480.1 on that volume of the diesel fuel sold pursuant to the
certificate.
   (b) A person is qualified for purposes of this section if both of
the following conditions are met:
   (1) The person sold diesel fuel that was used by the consumer in a
manner that qualified, or would have qualified for an exemption
under Section 6357.1, and in the prior year, those sales totaled more
than 25 percent of the person's total taxable sales.
   (2) The person's sales consist primarily of either bulk deliveries
of fuel or of fuel sales through a cardlock, keylock, or other
unattended mechanism, or both.  For purposes of the preceding
sentence, "bulk deliveries" means transfers of fuel into storage
tanks of 500 gallons or more.
   (c) A person issuing a certificate pursuant to this section is
liable for sales tax that is imposed under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200))
or in accordance with the Transactions and Use Tax Law (Part 1.6
(commencing with Section 7251)) and sales tax that is imposed under
Section 6051.2 or 6201.2, or under Section 35 of Article XIII of the
California Constitution.
   (d) A person issuing a certificate pursuant to this section shall
be liable for sales tax on any portion of the gross receipts derived
from the sale of fuel that is not sold in a manner that qualifies for
an exemption under Section 6357.1.
   (e) A person liable for the sales tax under subdivision (c) or (d)
of this section shall report and pay that sales tax with the return
for the reporting period in which the person sells the fuel.
   (f) Any person who gives a certificate pursuant to this section
for purchases of diesel fuel that he or she knows at the time of
purchase do not qualify for the exemption from the prepayment
pursuant to this section for the purpose of evading payment of the
prepayment of the retail sales tax is guilty of a misdemeanor
punishable as provided in Section 7153.  In addition, the person
shall be liable to the state for a penalty of one thousand dollars
($1,000) for each certificate issued for personal gain or to evade
the payment of taxes.