Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011
 

Use Fuel Tax Law

CHAPTER 5. COLLECTION OF TAX.



CHAPTER 5. COLLECTION OF TAX.

Article 1. Security for Tax

8951. Security. The board, whenever it deems it necessary to ensure compliance with this part or any rule or regulation adopted under this part, may require any user or vendor to deposit with it any security that it may determine. Any security in the form of cash, government bonds, or insured deposits in banks and savings and loan institutions shall be held by the board in trust to be used solely in the manner provided for by this section and Section 8956. The board may sell the security at public sale if it becomes necessary in order to recover any amount due under this part. Notice of the sale may be served upon the person who deposited the security personally or by mail in the manner prescribed for service of notice of a deficiency determination. Upon any sale, any surplus above the amount due shall be returned to the person who deposited the security.

History.—Stats. 1945, p. 1439, in effect September 15, 1945, added fourth sentence. Stats. 1990, Ch. 1528, in effect January 1, 1991, substituted "ensure" for "insure" before "compliance", and added "or vendor" after "user", in the first sentence. Stats. 1991, Ch. 770, in effect January 1, 1992, added "or wholesaler" after "vendor" in the first sentence; added the second sentence. Stats. 1994, Ch. 903, in effect January 1, 1995, substituted "any" for "such" after "deposit with it" and substituted "that" for "as" after "it any security" in the first sentence; added "by" after "manner provided for" in the second sentence; deleted "so to do" after "becomes necessary" in the third sentence; and deleted "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, however, be sold by the board at private sale at a price not lower than the prevailing market price thereof." as the fifth sentence. Stats. 1994, Ch. 912, in effect September 28, 1994 but operative July 1, 1995, deleted ", or wholesaler" after "user or vendor" in the first sentence.

8952. Notice of delinquency to creditors, etc. If any user is delinquent in the payment of any obligation imposed under this part, or in the event a determination has been made against such a user which remains unpaid, the board may, not later than three years after the payment becomes delinquent, or within 10 years after the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code, give notice thereof, personally or by first-class mail to all persons, including any officer or department of the state or any political subdivision or agency of the state, having in their possession or under their control any credits or other personal property belonging to the user, or owing any debts to the user. In the case of any state officer, department or agency, the notice shall be given to such officer, department or agency prior to the time it presents the claim of the delinquent taxpayer to the State Controller.

History.—Stats. 1963, p. 1434, in effect September 20, 1963, completely revised this section. Stats. 1971, p. 3528, operative on and after January 1, 1972, applicable only with respect to certificates of lien or abstracts of judgment filed on or after that date. Substitutes "10 years after last recording" for "3 years after last recording". Stats. 1977, Ch. 481, operative July 1, 1978, deleted "of a certificate" and substituted "or filing of a notice of state tax lien". Stats. 1978, Ch. 827, effective January 1, 1979, substituted "first-class" for "registered". Stats. 1980, Ch. 600, operative January 1, 1981, substituted "Section 7171 of the Government Code" for "Section 8996".

8953. Non-transferability after notice. After receiving the notice the persons so notified shall neither transfer nor make any other disposition of the credits, other personal property, or debts in their possession or under their control at the time they receive the notice until the board consents to a transfer or disposition or until 60 days elapse after the receipt of the notice, whichever period expires the earlier.

History.—Added by Stats. 1963, p. 1434, in effect September 20, 1963.

8954. Advise board; effective notice. All persons so notified shall forthwith after receipt of the notice advise the board of all credits, other personal property, or debts in their possession, under their control, or owing by them. If such notice seeks to prevent the transfer or other disposition of a deposit in a bank or other credits or personal property in the possession or under the control of a bank, the notice to be effective shall state the amount, interest and penalty due from the person and shall be delivered or mailed to the branch or office of such bank at which such deposit is carried or at which such credits or personal property is held. Notwithstanding any other provision, with respect to a deposit in a bank or other credits or personal property in the possession or under the control of a bank, the notice shall be effective with respect to an amount not in excess of two times the amount, interest and penalty due from the person.

History.—Added by Stats. 1963, p. 1434, in effect September 20, 1963. Stats. 1972, Ch. 103, operative March 7, 1973, added "shall state the amount, interest and penalty due from the person and", and added the third sentence.

8955. Liability for transfer. If, during the effective period of the notice to withhold, any person so notified makes any transfer or disposition of the property or debts required to be withheld, to the extent of the value of the property or the amount of the debts thus transferred or paid, he shall be liable to the State for any indebtedness due under this part from the person with respect to whose obligation the notice was given if solely by reason of such transfer or disposition the State is unable to recover the indebtedness of the person with respect to whose obligation the notice was given.

History.—Added by Stats. 1963, p. 1434, in effect September 20, 1963.

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8956. Effect of security for tax when business discontinued. If, at the time a person ceases to be a user or vendor under this part, the board holds security pursuant to Section 8951 in the form of cash, government bonds, or insured deposits in banks or savings and loan institutions, the security when applied to the account of the taxpayer shall be deemed to be a payment on account of any liability of the taxpayer to the board on the date the person ceases to be a user or vendor under this part.

History.—Added by Stats. 1967, p. 2327, in effect November 8, 1967. Stats. 1991, Ch. 770, in effect January 1, 1992, added "or wholesaler" after "vendor". Stats. 1994, Ch. 912, in effect September 28, 1994, but operative July 1, 1995, substituted "user or vendor" for "user, vendor, or wholesaler" after "to be a", and substituted "the" for "such" after "loan institutions,".

8957. Notice; credits held by person other than taxpayer.
[Repealed by Stats. 1986, Ch. 1361, effective January 1, 1987.]

Text of section operative through June 30, 2001

8957. Notice of levy. (a) Subject to the limitations in subdivisions (b) and (c), the board may by notice of levy, served personally or by first-class mail, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a user, vendor, or other person liable for any amount under this part to withhold from those credits or other personal property the amount of any tax, interest, or penalties due from that user, vendor, or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the board at those times as it may designate. The notice of levy shall have the same effect as a levy pursuant to a writ of execution except for the continuing effect of the levy, as provided in subdivision (b).

(b) The person served shall continue to withhold pursuant to the notice of levy until the amount specified in the notice, including accrued interest, has been paid in full, until the notice is withdrawn, or until one year from the date the notice is received, whichever occurs first.

(c) The amount required to be withheld is the lesser of the following:

(1) The amount due stated on the notice.

(2) The sum of both of the following:

(A) The amount of the payments, credits other than payments, or personal property described above and under the person's possession or control when the notice of levy is served on the person.

(B) The amount of each payment that becomes due following service of the notice of levy on the person and prior to the expiration of the levy.

(d) For the purposes of this section, the term "payments" does not include earnings as that term is defined in subdivision (a) of Section 706.011 of the Code of Civil Procedure or funds in a deposit account as defined in Section 9105 of the Commercial Code. The term "payments" does include any of the following:

(1) Payments due for services of independent contractors, dividends, rents, royalties, residuals, patent rights, or mineral or other natural rights.

(2) Payments or credits due or becoming due periodically as a result of an enforceable obligation to the user, vendor, or other person liable for the tax.

(3) Any other payments or credits due or becoming due the user, vendor, or other person liable as the result of written or oral contracts for services or sales whether denominated as wages, salary, commission, bonus, or otherwise.

(e) In the case of a financial institution, to be effective, the notice shall state the amount due from the taxpayer and shall be delivered or mailed to the branch or office of the financial institution where the credits or other property is held, unless another branch or office is designated by the financial institution to receive the notice.

History.—Added by Stats. 1986, Ch. 1361, effective January 1, 1987. Stats. 1991, Ch. 770, in effect January 1, 1992, added "wholesaler" after "vendor" in subdivision (a), paragraph (2) of subdivision (c), and paragraph (2) and (3) of subdivision (d). Stats. 1994, Ch. 912, in effect September 28, 1994, but operative July 1, 1995, deleted "or wholesaler," after "to the user, vendor," in subdivisions (a), (c)(2), (d)(2), and (d)(3), and substituted "those" for "such" after "to the board at" in subdivision (a). Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, substituted "payments, credits other than payments," for "credits" after "their control, any" in the first sentence and added "The notice of . . . in subdivision (b)." as the second sentence in subdivision (a); substituted "sum of both . . . of the levy" for "amount of each payment due or becoming due to the user, vendor, or other person liable during the period" after "(2) The" in subdivision (c); and added "or" after "residual, patent rights," in subparagraph (1) of subdivision (d).

Text of section operative July 1, 2001

8957. Notice of levy. (a) Subject to the limitations in subdivisions (b) and (c), the board may by notice of levy, served personally or by first-class mail, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a user, vendor, or other person liable for any amount under this part to withhold from those credits or other personal property the amount of any tax, interest, or penalties due from that user, vendor, or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the board at those times as it may designate. The notice of levy shall have the same effect as a levy pursuant to a writ of execution except for the continuing effect of the levy, as provided in subdivision (b).

(b) The person served shall continue to withhold pursuant to the notice of levy until the amount specified in the notice, including accrued interest, has been paid in full, until the notice is withdrawn, or until one year from the date the notice is received, whichever occurs first.

(c) The amount required to be withheld is the lesser of the following:

(1) The amount due stated on the notice.

(2) The sum of both of the following:

(A) The amount of the payments, credits other than payments, or personal property described above and under the person's possession or control when the notice of levy is served on the person.

(B) The amount of each payment that becomes due following service of the notice of levy on the person and prior to the expiration of the levy.

(d) For the purposes of this section, the term "payments" does not include earnings as that term is defined in subdivision (a) of Section 706.011 of the Code of Civil Procedure or funds in a deposit account as defined in paragraph (29) of subdivision (a) of Section 9102 of the Commercial Code. The term "payments" does include any of the following:

(1) Payments due for services of independent contractors, dividends, rents, royalties, residuals, patent rights, or mineral or other natural rights.

(2) Payments or credits due or becoming due periodically as a result of an enforceable obligation to the user, vendor, or other person liable for the tax.

(3) Any other payments or credits due or becoming due the user, vendor, or other person liable as the result of written or oral contracts for services or sales whether denominated as wages, salary, commission, bonus, or otherwise.

(e) In the case of a financial institution, to be effective, the notice shall state the amount due from the taxpayer and shall be delivered or mailed to the branch or office of the financial institution where the credits or other property is held, unless another branch or office is designated by the financial institution to receive the notice.

History.—Added by Stats. 1986, Ch. 1361, effective January 1, 1987. Stats. 1991, Ch. 770, in effect January 1, 1992, added "wholesaler" after "vendor" in subdivision (a), paragraph (2) of subdivision (c), and paragraph (2) and (3) of subdivision (d). Stats. 1994, Ch. 912, in effect September 28, 1994, but operative July 1, 1995, deleted "or wholesaler," after "to the user, vendor," in subdivisions (a), (c)(2), (d)(2), and (d)(3), and substituted "those" for "such" after "to the board at" in subdivision (a). Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999, substituted "payments, credits other than payments," for "credits" after "their control, any" in the first sentence and added "The notice of . . . in subdivision (b)." as the second sentence in subdivision (a); substituted "sum of both . . . of the levy" for "amount of each payment due or becoming due to the user, vendor, or other person liable during the period" after "(2) The" in subdivision (c); and added "or" after "residual, patent rights," in subparagraph (1) of subdivision (d). Stats. 1999, Ch. 991 (SB 45), in effect January 1, 2000, but operative July 1, 2001, substituted "paragraph (29) of subdivision (a) of Section 9102" for "Section 9105" after "as defined in" in subdivision (d).

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8958. Employer withheld earnings. (a) Notwithstanding Article 7 (commencing with Section 706.151) of Chapter 5 of Title 9 of Part 2 of the Code of Civil Procedure, if the board determines upon receiving information from a user or other person liable for any amount under this part that the person's employer withheld earnings for tax as pursuant to Section 8957 and failed to remit the withheld earnings to the board, the employer shall be liable for the amount not remitted. The board's determination shall be based on payroll documents or other substantiating evidence furnished by the person liable for the tax.

(b) Upon its determination, the board shall mail notice to the employer at its last known address that upon failure to remit the withheld earnings to the board within 15 days of the date of its notice to the employer, the employer shall be liable for that amount which was withheld and not remitted.

(c) If the employer fails to remit the amount withheld to the board upon notice, that amount for which the employer is liable shall be determined, collected, and paid as though it were a tax deficiency. The amount may be assessed at any time prior to seven years from the first day that the unremitted amount, in the aggregate, was first withheld. Interest shall accrue on that amount from the first day that the unremitted amount, in the aggregate, was first withheld.

(d) When the determination against the employer is final and due and payable, the person's account shall be immediately credited with an amount equal to that determined amount as though it were a payment received by the board on the first date that the unremitted amount, in the aggregate, was first withheld by the employer.

(e) Collection against the person liable for the tax is stayed for both the following amount and period:

(1) An amount equal to the amount determined by the board under subdivision (a).

(2) The earlier of the time the credit is applied to the person's account pursuant to subdivision (d) or the determination against the employer is withdrawn or revised and the person is notified by the board thereof.

(f) If under this section an amount that was withheld and not remitted to the board is final and due and payable by the employer, and credited to the person's account, this remedy shall be the exclusive remedy for the person to recover that amount from the employer.

(g) This section shall apply to determinations made by the board on or after the effective date of the act adding this section.

History.—Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001.

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Article 2. Suit for Tax

8971. Court action. At any time within three years after any tax or any amount of tax required to be collected becomes due and payable and at any time within three years after the delinquency of any tax or any amount of tax required to be collected, or within the period during which a lien is in force as the result of the filing of a notice of state tax lien under Section 7171 of the Government Code, the board may bring an action in the courts of this state, of any other state, or of the United States in the name of the state to collect the amount delinquent together with penalties and interest.

History.—Stats. 1980, Ch. 546, operative January 1, 1981, completely reworded. Previously provided for referral of delinquency to Attorney General. Stats. 1981, Ch. 947, in effect January 1, 1982, added "of the Government Code" after "Section 7171" in the first sentence.

The Board's Interpretation of "Due and Payable" under Revenue and Taxation Code Sections 8971 and 60421 is
Correct.—
Cool Fuel, Inc., a licensed fuel wholesaler, was investigated by the Board and found liable for over $2.5 million for unpaid monthly use fuel taxes for diesel fuel sold in 1993. Cool Fuel requested a re-determination and a hearing before the Board, but before the Board issued a final determination, Cool Fuel filed for chapter 11 bankruptcy protection. The Board filed a proof of claim in the bankruptcy case for $2,606,570 in disputed taxes and interest. Cool Fuel objected to the Board's claim on the basis that it was barred by the three-year statute of limitations provided by Revenue and Taxation Code Sections 8971 and 60421. The Board argued that Revenue and Taxation Code Sections 8854 and 60355 define "due and payable" under Sections 8971 and 60421 as upon a final determination. Consequently, the Sections 8971 and 60421 time limitation period had not yet even begun and the Board's claim was not time barred. The Ninth Circuit held that the Board's interpretation was correct. Therefore, the amount of tax due pursuant to a Board determination is "due and payable" when the determination becomes final. Cool Fuel Inc. vs. Board of Equalization (In re Cool Fuel, Inc.) (2000) 210 F.3d 999. Subsequently, the Board's claim was dismissed on summary judgment. On appeal, the Ninth Circuit reversed and remanded with instructions to enter judgment in favor of the Board. In re Cool Fueling. (2004) 117 Fed. Appx. 514, unpublished. On appeal, the Bankruptcy Appeal Panel affirmed. BAP No. CC-05–1121-KPaB, June 21, 2006.

8972. Attachment. In the action a writ of attachment may be issued in the manner provided by Chapter 5 (commencing with Section 485.010) of Title 6.5 of Part 2 of the Code of Civil Procedure without the showing required by Section 485.010 of the Code of Civil Procedure.

History.—Stats. 1974, Ch. 1516, effective January 1, 1975, deleted the statement that no bond or affidavit was required previous to the issuing of the attachment, and added the proviso that the writ of attachment may be issued in the described manner.

8973. Prima facie evidence. In the action a certificate by the board showing the delinquency shall be prima facie evidence of the levy of the tax of the delinquency of the amount of tax, interest, and penalty set forth, and of compliance by the board with all provisions of this part in relation to the computation and levy of the tax.

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Article 3. Lien of Tax

8991. Lien. Notwithstanding the provisions of Section 8996, the excise tax, interest, and penalties are a lien upon and have the effect of an execution duly levied against any motor vehicle in which fuel taxable under this part is used and against any personal property of the user.

History.—Stats. 1957, p. 3771, in effect September 11, 1957, added "and against any other personal property of the user." Stats. 1959, p. 2804, in effect September 18, 1959, deleted "other" before "personal property."Stats. 1977, Ch. 481, operative July 1, 1978, added "Notwithstanding the provisions of Section 8996,".

Vehicle subject to lien.—Where the board and Controller seized a truck claiming a lien thereon for use fuel taxes accrued in connection with the seized truck and three other trucks operated by the tax debtor, the provision that "any motor vehicle in which fuel taxable under this part is used" means that each vehicle of a user in which taxable fuel was used was subject to a lien for all the fuel tax liability of the user and not merely that incurred through the particular vehicle. Hillmert v. State Board of Equalization, (1963) 218 Cal.App.2d 578.

8992. Time of attachment. The lien arising under Section 8991 attaches at the time a vehicle is operated in this state through the use of fuel taxable under this part.

History.—Stats. 1957, p. 3772, in effect September 11, 1957, substituted "a" for "the" before "vehicle," deleted "the" before "fuel," and added "taxable under this part." Stats. 1977, Ch. 481, operative July 1, 1978, added "arising under Section 8991" following "lien".

8993. Removal of lien. The lien arising under Section 8991 shall not be removed until the excise tax, interest, and penalties are paid or the vehicle or other property subject to the lien is sold in payment thereof.

History.—Stats. 1957, p. 3772, in effect September 11, 1957, added "or other property." Stats. 1977, Ch. 481, operative July 1, 1978, added "arising under Section 8991" following "lien".

8994. Priority. The lien arising under Section 8991 as to the tax and interest, but exclusive of penalties, upon personal property is paramount to all private liens or encumbrances of whatever character, and to the rights of any conditional vendor or any other holder of the legal title, in or to any motor vehicle which is operated in this state through the use of fuel taxable under this part.

History.—Stats. 1957, p. 3772, in effect September 11, 1957, deleted "such" before "motor" and added the last clause. Stats. 1959, p. 2804, in effect September 18, 1959, added "as to the tax and interest, but exclusive of penalties, upon personal property."Stats. 1977, Ch. 481, operative July 1, 1978, added "arising under Section 8991" following "lien".

Constitutionality.—The provision making use fuel tax liens paramount to all private liens or encumbrances on a vehicle and to the rights of any conditional vendor or holder of legal title in or to a vehicle is not unconstitutional. Hillmert v. State Board of Equalization, (1963) 218 Cal.App.2d 578.

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8995. Certificate of clearance; transfer of ownership. The Department of Motor Vehicles may transfer the registered ownership of any motor vehicle using fuel taxable under this part only after a certificate of excise tax clearance has been issued by the board. The certificate may be issued after the payment of all amounts due under this part, according to the records of the board as of the date of the certificate, or after the payment of the amounts is secured to the satisfaction of the board.

An excise tax clearance certificate shall not be required to transfer the registered ownership of a passenger vehicle as defined in Section 465 of the Vehicle Code.

History.—Stats. 1945, p. 1439, in effect September 15, 1945, added "according to the records of the board as of the date of the certificate." Stats. 1979, Ch. 260, effective July 17, 1979, added second paragraph.

Failure to acquire clearance.—Where the State Board of Equalization and Controller seized a truck for the tax debts of a prior owner and where the subsequent owner purchased the truck knowing that it had been operated in California by the prior owner, that such operation may have resulted in unpaid use fuel taxes, that there may have been a lien upon the truck, and where the subsequent owner inquired of the prior owner and a representative of the vendor of the truck to the subsequent owner concerning taxes due the State of California, but did not inquire of the State Board of Equalization or take any other action to determine whether the truck was subject to the lien for taxes, the truck was subject to the lien for the taxes of the prior owner. Hillmert v. State Board of Equalization, (1963) 218 Cal.App.2d 578. Stats.

8996. Recording certificate; lien. [Repealed by Stats. 1977, Ch. 481, operative July 1, 1978.]

8996. Liens; perfection and enforceability of. (a) If any person fails to pay any amount imposed under this part at the time that it becomes due and payable, the amount thereof, including penalties and interest, together with any costs in addition thereto, shall thereupon be a perfected and enforceable state tax lien. Such a lien is subject to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.

(b) For the purpose of this section, amounts are "due and payable" on the following dates:

(1) For amounts disclosed on a return received by the board before the date the return is delinquent, the date the return would have been delinquent;

(2) For amounts disclosed on a return filed on or after the date the return is delinquent, the date the return is received by the board;

(3) For amounts determined under Section 8826 (pertaining to jeopardy assessments), the date the notice of the board's finding is mailed or issued;

(4) For all other amounts, the date the assessment is final.

History.—Added by Stats. 1977, Ch. 481, operative July 1, 1978. Stats. 1979, Ch. 322, effective January 1, 1980, changed wording of second paragraph of (a), deleted reference to judgment creditors following second sentence of (f), changed "January 1, 1978" to "July 1, 1978" in (g). Stats. 1980, Ch. 600, operative January 1, 1981, deleted part of first sentence in (a) following "lien"; substituted present second sentence for former second sentence; renumbered second paragraph of (a) to become (b); deleted former (b), (c), (d), (e), (f), (g).

8997. Release of lien. [Repealed by Stats. 1980, Ch. 600, operative January 1, 1981.]

8997.5. Unenforceable lien. [Repealed by Stats. 1980, Ch. 600, operative January 1, 1981.]

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Article 3.5. Warrant for Collection of Tax

9001. Warrant; time of issuing. At any time within three years after any person is delinquent in the payment of any amount herein required to be paid or within 10 years after the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code, the board or its authorized representative may issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the state under this part. The warrant shall be directed to any sheriff or marshal and shall have the same effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the same manner and with the same effect as a levy of and a sale pursuant to a writ of execution.

History.—Added by Stats. 1955, p. 3289, in effect September 7, 1955. Stats. 1965, p. 2071, in effect September 17, 1965, added "or within 10 years after the last recording of a certificate under Section 8996" in the first sentence. Stats. 1977, Ch. 481, operative July 1, 1978, substituted "or filing of a notice of state tax lien" in place of "of a certificate". Stats. 1980, Ch. 600, operative January 1, 1981, substituted "Section 7171 of the Government Code" for "Section 8996". Stats. 1996, Ch. 872, in effect January 1, 1997, substituted "or marshal" for ", marshal, or constable" after "to any sheriff" in the second sentence.

9002. Fees and expenses. The board may pay or advance to the sheriff or marshal, the same fees, commissions, and expenses for his or her services as are provided by law for similar services pursuant to a writ of execution. The board, and not the court, shall approve the fees for publication in a newspaper.

History.—Added by Stats. 1955, p. 3289, in effect September 7, 1955. Stats. 1996, Ch. 872, in effect January 1, 1997, substituted "or marshal" for ", marshal or constable" after "to the sheriff" and added "or her" after "expenses for his" in the first sentence.

9003. Collection of fees. The fees, commissions, and expenses are the obligation of the person required to pay any amount under this part and may be collected from him by virtue of the warrant or in any other manner provided in this part for the collection of the tax.

History.—Added by Stats. 1955, p. 3289, in effect September 7, 1955.

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Article 4. Seizure and Sale

9011. Seizure and sale; authority of board. Whenever any user is delinquent in the payment of the obligations imposed under this part, the board or its authorized representative may collect the amount due in the following manner: The board may seize any property, real or personal, subject to the lien of the tax and thereafter sell the property, or a sufficient part of it, at public auction to pay the tax due together with any interest and penalties imposed for the delinquency and any costs incurred on account of the seizure and sale.

History.—Stats. 1957, p. 3772, in effect September 11, 1957, reworded the language following the colon so as to apply to any property and not merely to a motor vehicle as formerly.

9012. Notice of sale; contents; publication. Notice of the sale and the time and place thereof shall be given in writing to the delinquent user and to all persons who have an interest of record in the property seized at least 20 days before the date set for the sale. The notice shall be personally served or enclosed in an envelope addressed to the user or other person at his or her last known residence or place of business in this state. If not personally served, the notice shall be deposited in the United States mail, postage prepaid. The notice shall be published pursuant to Section 6063 of the Government Code, in a newspaper of general circulation published in the city in which the property or a part thereof is situated if any part thereof is situated in a city or, if not, in a newspaper of general circulation published in the county in which the property or a part thereof is located. Notice shall also be posted in both of the following manners:

(a) One public place in the city in which the interest in property is to be sold if it is to be sold in a city or, if not to be sold in a city, one public place in the county in which the interest in the property is to be sold.

(b) One conspicuous place on the property.

The notice shall contain a description of the property to be sold, a statement of the amount due, including tax, penalties, interest, and costs, the name of the user, and the further statement that unless the amount is paid on or before the time fixed in the notice of sale, the property, or so much of it as may be necessary, will be sold in accordance with law and the notice.

History.—Stats. 1957, p. 3773, in effect September 11, 1957, substituted "property" for "motor vehicle" in the first and second sentences, and for "vehicle" in the fourth sentence. Stats. 1990, Ch. 1528, in effect January 1, 1991, substituted "who have an interest" for "appearing", deleted "to have an interest", and substituted "20" for "10" in the first sentence; added "personally served or", "or other person", and "or her", in the second sentence; substituted "If not personally served the notice" for "and in the case of any person appearing of record to have an interest in the property seized, addressed to the person at his last known residence or place of business in this State" in the third sentence; deleted "also" after "notice shall", and substituted "pursuant to Section 6063 of the Government Code," for "for at least 10 days before the date set for sale", substituted "city" for "county" after "published in the" in the fourth sentence; substituted "or a part thereof is situated in any part thereof is situated in a city or, if not, in a" for "seized is to be sold. If there is no" combining the fourth and fifth sentences into the fourth sentence; added "published" after "circulation", and substituted "in which the property or a part thereof is located" to the combined portion of the former sentences four and five; added "Notice shall also be posted in both of the following manners:" as the fifth sentence; added subdivisions (a) and (b) in front of the former last sentence creating a new paragraph; added ", or so much of it as may be necessary," before "will be sold" in the last paragraph.

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9012.5. Seizure for private sale. The board may seize any motor vehicle subject to the lien of the tax and thereafter sell the vehicle at private sale to pay the tax due, together with any interest and penalties imposed for the delinquency and any costs incurred on account of the seizure and sale.

History.—Added by Stats. 1957, p. 3773, in effect September 11, 1957.

9012.6. Notice of private sale. Notice of the sale shall be given in writing to the delinquent user and to all persons appearng of record to have an interest in the motor vehicle at least 10 days before the date set for the sale of the vehicle. The notice shall be enclosed in an envelope addressed to the user at his last known residence or place of business and, in the case of any person appearing of record to have an interest in the motor vehicle, addressed to the person at his last known residence or place of business. It shall be deposited in the United States mail, postage prepaid. The notice shall contain a description of the motor vehicle to be sold, a statement of the amount due, interest, penalties and costs, the name of the user, and the further statement that unless the tax due, interest, penalties and costs are paid within 10 days the motor vehicle will be sold at private sale.

History.—Added by Stats. 1957, p. 3773, in effect September 11, 1957.

9013. Conduct of sale. At any sale the board or its authorized agent shall sell the property in accordance with the law and the notice and shall deliver to the purchaser a bill of sale for the personal property and a deed for any real property sold. The bill of sale or deed vests title in the purchaser. The unsold portion of any property seized may be left at the place of sale at the risk of the user.

History.—Stats. 1957, p. 3773, in effect September 11, 1957, substituted "any" for "the" after "at," "property" for "vehicle," and "for the personal property and a deed for any real property sold" for "which vests title in the purchaser" in first sentence, and added the second and third sentences.

9014. Disposition of proceeds. If upon any sale the moneys received exceed the amount due to the state from the user, the board shall return the excess to the user and obtain his or her receipt. If any person having an interest in or lien upon the property files with the board prior to the sale notice of his or her interest or lien, the board shall withhold payment of any excess pending a determination of the rights of the respective parties thereto by a court of competent jurisdiction. If for any reason the receipt of the user is not available, the board shall deposit the excess moneys with the Controller, as trustee for the user, subject to the order of the user, his or her heirs, successors, or assigns.

History—Stats. 1957, p. 3774, in effect September 11, 1957, substituted "any" for "the" following "if upon" in first sentence and "property" for "motor vehicle" in second sentence. Stats. 1996, Ch. 860, in effect January 1, 1997, substituted "state" for "State" after "due to the" and added "or her" after "and obtain his" in the first sentence, added "or her" after "notice of his" in the second sentence, and substituted "Controller" for "State Treasurer" after "moneys with the" and added "or her" after "the user, his" in the last sentence.

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Article 4.5. Successor Withholding and Liability1

1 Article 4.5 was added by Stats. 1986, Ch. 1361, effective January 1, 1987.

9021. Successor withholding. If any vendor liable for any amount under this part sells out his or her business or stock of goods or quits the business, his or her successor or assigns shall withhold from the purchase price an amount sufficient to cover that amount until the former owner produces a receipt from the board showing that it has been paid or a certificate stating that no amount is due.

History.—Stats. 1991, Ch. 770, in effect January 1, 1992, added "or wholesaler" after "vendor" in the first sentence. Stats. 1994, Ch. 912, in effect September 28, 1994, but operative July 1, 1995, deleted "or wholesaler" after "If any vendor".

9022. Successor liability; certificate of tax clearance. (a) If the purchaser of a business or stock of goods fails to withhold the purchase price as required, he or she becomes personally liable for the payment of the amount required to be withheld by him or her to the extent of the purchase price valued in money.

(b) (1) Within 60 days after the latest of the dates specified in paragraph (2), the board shall either issue the certificate or mail notice to the purchaser at his or her address as it appears on the records of the board of the amount that must be paid as a condition of issuing the certificate.

(2) For purposes of paragraph (1), the latest of the following dates shall apply:

(A) The date the board receives a written request from the purchaser for a certificate.

(B) The date of the sale of the business or stock of goods.

(C) The date the former owner's records are made available for audit.

(c) Failure of the board to mail the notice referred to in subdivision (b) shall release the purchaser from any further obligation to withhold from the purchase price under this article. The last date upon which the obligation of the successor may be enforced shall be not later than three years after the date the board is notified of the purchase of the business or stock of goods.

History.—Stats. 1991, Ch. 236, in effect July 29, 1991, added "from the" after "withhold" in the first sentence of subdivision (c); substituted "last date upon" for "time within" after "The", substituted "be not later. . .purchase of the" for "begin to run at the time the person sells out his or her", and deleted "or at the time that the determination against the person becomes final, whichever event occurs the later" after "of goods" in the second sentence of subdivision (c).

9023. Certificate of tax clearance. The certificate may be issued after the payment of all amounts due under this part, according to the records of the board as of the date of the certificate, or after the payment of the amounts is secured to the satisfaction of the board.

9024. Notice of successor liability. The obligation of the successor shall be enforced by serving a notice of successor liability on the person. The notice shall be served in the manner prescribed for service of a notice of a deficiency determination, not later than three years after the date the board is notified of the purchase of the business or stock of goods. The successor may petition for reconsideration in the manner provided in Article 5 (commencing with Section 8851) of Chapter 4. The notice shall become final and the amount due and payable in the manner provided in that article except that no additional penalty shall apply if not paid when due and payable. This chapter, with respect to the collection of any amount required to be paid under this part, shall apply when the notice becomes final.

History.—Stats. 1990, Ch. 74, in effect January 1, 1991 added ", not later than . . . stock of goods." to the second sentence.

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Article 5. Miscellaneous Provisions

9031. Cumulative remedies. The remedies of the State provided for in this chapter are cumulative, and no action taken by the board constitutes an election by the State to pursue any remedy to the exclusion of any other remedy for which provision is made in this part.

9032. Furnishing of partnership agreement. The board shall not be subject to subdivisions (c) and (d) of Section 16307 of the Corporations Code unless, at the time of application for or issuance of a permit, license, or registration number under this part, the applicant furnishes to the board a written partnership agreement that provides that all business assets shall be held in the name of the partnership.

History.—Added by Stats. 1996, Ch. 1003, in effect January 1, 1997.

9033. Installment payment agreement. (a) The board may, in its discretion, enter into a written installment payment agreement with a person for the payment of any taxes due, together with interest thereon and any applicable penalties, in installments over an agreed period. With mutual consent, the board and the taxpayer may alter or modify the agreement.

(b) Upon failure of a person to fully comply with the terms of an installment payment agreement with the board, the board may terminate the agreement by mailing a notice of termination to the person. The notice shall include an explanation of the basis for the termination and inform the person of his or her right to request an administrative review of the termination. Fifteen days after the mailing of the notice, the installment payment agreement shall be void, and the total amount of the tax, interest, and penalties due shall be immediately payable.

(c) The board shall establish procedures for an administrative review for persons requesting that review whose installment payment agreements are terminated under subdivision (b). The collection of taxes, interest, and penalties that are the subject of the terminated installment payment agreement may not be stayed during this administrative review process.

(d) Subdivision (b) shall not apply to any case where the board finds collection of the tax to be in jeopardy.

(e) Except in the case of fraud, if an installment payment agreement is entered into within 45 days from the date on which the board's notice of determination or redetermination becomes final, and the person complies with the terms of the installment payment agreement, the board shall relieve the penalty imposed pursuant to Section 8854.

History.—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000. Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001, added subdivision (e).

9033.5. Installment payment annual statement. The board, beginning no later than January 1, 2001, shall provide each taxpayer who has an installment payment agreement in effect under Section 9033 an annual statement setting forth the initial balance at the beginning of the year, the payments made during the year, and the remaining balance as of the end of the year.

History.—Added by Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001.

9035. Collection cost recovery fee. (a) A collection cost recovery fee shall be imposed on any person that fails to pay an amount of tax, interest, penalty, or other amount due and payable under this part. The collection cost recovery fee shall be in an amount equal to the board's costs for collection, as reasonably determined by the board. The collection cost recovery fee shall be imposed only if the board has mailed its demand notice, to that person for payment, that advises that continued failure to pay the amount due may result in collection action, including the imposition of a collection cost recovery fee.

(b) Interest shall not accrue with respect to the collection cost recovery fee provided by this section.

(c) The collection cost recovery fee imposed pursuant to this section shall be collected in the same manner as the collection of any other tax imposed by this part.

(d) (1) If the board finds that a person's failure to pay any amount under this part is due to reasonable cause and circumstances beyond the person's control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person shall be relieved of the collection cost recovery fee provided by this section.

(2) Any person seeking to be relieved of the collection cost recovery fee shall file with the board a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

(e) Subdivision (a) shall be operative with respect to a demand notice for payment which is mailed on or after January 1, 2011.

(f) Collection cost recovery fee revenues shall be deposited in the same manner as revenues derived from any other tax imposed by this part.

History.—Added by Stats. 2010, Ch. 721 (SB 858), in effect October 19, 2010, operative January 1, 2011

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