California –BOE Adopts Amendments to Regulation 1705 Relief From Liability

SALT Report 3228 – This proposed Regulatory change was adopted during the BOE’s January 16, 2014 meeting held in Sacramento.  Regulation 1705, Relief From Liability addresses the circumstances under which “a person may be relieved from liability for the payment of sales and use taxes”.  The changes relate to who may rely upon written advice from the board received during an audit.  In addition to the person audited “a person with shared accounting and common ownership with the audited person” may also rely on the written advice.  The Regulation goes on to add in Regulation 1705(c) examples and clarifications for who would be considered to have “shared accounting and common ownership”.

It should also be noted that the final paragraph of the changes states that subsequent written notification of invalid advice submitted to “any party with shared accounting and common ownership, including the audited party, serves as notification to all parties, with shared accounting and common ownership, including the audited party, that the prior written advice may not be relied upon as of the notification date.”

For Further Information:                    

Amended Regulation 1705 Relief from Liability