Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Division 2. Other Taxes

Part 18.5. Timber Yield Tax

CHAPTER 6. Collection of Taxes


Chapter 6. Collection of Taxes

Article 1. Security for Tax

38501. Security. The board, whenever it deems it necessary to ensure compliance with this part, may require any person subject thereto, to place with it such security as the board may determine. Any security in the form of cash, government bonds, or insured deposits in banks or savings and loan institutions shall be held by the board in trust to be used solely in the manner provided by this section and Section 38565. The amount of the security shall be fixed by the board but, except as noted below, shall not be greater than twice the estimated average liability of persons filing returns for quarterly periods or three times the estimated average liability of persons required to file returns for monthly periods, determined in such manner as the board deems proper, or ten thousand dollars ($10,000), whichever amount is the lesser. The limitations herein provided 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 limitations herein provided. The board may sell the security at public auction if it becomes necessary to do so in order to recover any tax or any amount required to be collected, interest, or penalty due. Notice of the sale may be served upon the person who placed the security personally or by mail; if 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. 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. Upon any sale any surplus above the amounts due shall be returned to the person who placed the security.

History.—Stats. 1991, Ch. 236, in effect July 29, 1991, substituted "ensure" for "insure" after "necessary to" in the first sentence, added the second sentence, substituted "to do so" for "so to do" after "necessary" in the sixth sentence; and added "or her" after "his" in the seventh sentence.

38502. Notice to creditors. [Repealed by Stats. 1987, Ch. 498, in effect January 1, 1988.]

38502. Notice to creditors. (a) If any person is delinquent in the payment of the amount required to be paid by him or her or in the event a determination has been made against him or her which remains unpaid, the board may, not later than three years after the payment became delinquent or within 10 years after the last recording of an abstract under Section 38523 or 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 its possession or under its control any credits or other personal property belonging to the delinquent, or person against whom a determination has been made which remains unpaid, or owing any debts to the delinquent or that person. In the case of any state officer, department, or agency, the notice shall be given to the officer, department, or agency prior to the time it presents the claim of the delinquent taxpayer to the Controller. 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 earlier. All persons so notified shall forthwith, after receipt of the notice, advise the board of all those credits, other personal property, or debts in their possession, under their control, or owing by them.

(b) If the notice seeks to prevent the transfer or other disposition of a deposit in a bank or a state or federal savings and loan association or other credits or personal property in the possession or under the control of a bank or a state or federal savings and loan association, the notice to be mailed shall state the amount, interest, and penalty due from the person, and shall be delivered or mailed to the branch or office of the bank or the state or federal savings and loan association at which the deposit is carried or at which the credits or personal property is held. A bank, a state or federal savings and loan association, or a state or federal credit union withholding any deposit or other credits or personal property required to be withheld in which the delinquent taxpayer and another person or persons have an interest, or held in the name of a third party or parties in which the delinquent taxpayer is ultimately determined to have no interest, is not liable therefor to any of the persons who have an interest in the deposit or other credits or personal property unless the deposit or other credits or personal property is released or transferred to the delinquent taxpayer.

(c) In the case of a deposit or other credits or personal property for which the transfer or other disposition is prevented, the depository institution required to prevent transfer or other disposition shall send a notice by first-class mail to each person named on a deposit, other credits, or personal property included in the notice from the board, provided a current address for each person is available to the depository institution. This notice shall inform each person as to the reason for preventing transfer or disposition of the deposit or other credits or personal property, the amount thereof which is prevented from transfer or other disposition, and the date by which that amount is to be remitted to the board. An institution may assess the deposit or other credits or personal property of each person receiving this notice a reasonable service charge not to exceed three dollars ($3).

(d) 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 or a state or federal savings and loan association, the aggregate amount of deposits, credits, or personal property to be withheld shall be an amount equal to two times the amount of the tax, interest, or penalty due from the person. 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 or she 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 that 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. 1987, Ch. 498, in effect January 1, 1988.

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38503. Notice of levy. [Repealed by Stats. 1987, Ch. 498, in effect January 1, 1988.]

Text of section effective until July 1, 2001

38503. 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 credits or other personal property belonging to a timber owner 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 timber owner, or the amount of any liability incurred by him or her under this part, and to transmit the amount withheld to the board at those times as it may designate.

(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 amount of each payment due or becoming due to the timber owner during the period of the levy.

(d) For the purposes of this section, "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. "Payments" does include all of the following:

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

(2) Payments or credits due or becoming due periodically as a result of an enforceable obligation to the timber owner liable for the tax.

(3) Any other payments or credits due or becoming due the timber owner 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. 1987, Ch. 498, in effect January 1, 1988.

Text of section operative July 1, 2001

38503. 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 credits or other personal property belonging to a timber owner 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 timber owner, or the amount of any liability incurred by him or her under this part, and to transmit the amount withheld to the board at those times as it may designate.

(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 amount of each payment due or becoming due to the timber owner during the period of the levy.

(d) For the purposes of this section, "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. "Payments" does include all of the following:

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

(2) Payments or credits due or becoming due periodically as a result of an enforceable obligation to the timber owner liable for the tax.

(3) Any other payments or credits due or becoming due the timber owner 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. 1987, Ch. 498, in effect January 1, 1988. Stats. 1999, Ch. 991 (SB 45), in effect January 1, 2000, 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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38503.5. Employer withheld earnings. (a) Notwithstanding Article 7 (commencing with Section 706.151) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, if the board determines upon receiving information from a person liable for any amount under this part that the person's employer withheld earnings for taxes pursuant to Section 38503 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.—Added by Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001.

38504. 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) The notice requirement in 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 in 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 38446.

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 "The notice requirement in" before "subdivision (b)" in the first sentence of subdivision (d) and added subdivision (e).

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38504.5. Installment payment agreement; 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 38504 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.

38505. Return of levied property. Except in any case where the board finds collection of the tax to be in jeopardy, if any property has been levied upon, the property or the proceeds from the sale of the property shall be returned to the taxpayer if the board determines any one of the following:

(a) The levy on the property was not in accordance with the law.

(b) The taxpayer has entered into and is in compliance with an installment payment agreement pursuant to Section 38504 to satisfy the tax liability for which the levy was imposed, unless that or another agreement allows for the levy.

(c) The return of the property will facilitate the collection of the tax liability or will be in the best interest of the state and the taxpayer.

History.—Added by Stats. 1999, Ch. 929 (AB 1638), in effect January 1, 2000.

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Article 2. Suit for Tax

38511. 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 recording of an abstract under Section 38523 or the recording or 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 people of the State of California to collect the amount delinquent together with penalties and interest.

History.—Stats. 1980, Ch. 600, in effect January 1, 1981, substituted "the recording or filing of a notice of state tax lien under Section 7171 of the Government Code" for "of a certificate under Section 38532 or 38533" after "38523 or" in the first sentence.

38512. Rules of procedure. 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.

38513. Attachment. In the action a writ of attachment may issue, and no bond or affidavit previous to the issuing of the attachment is required.

38514. Certificate of delinquency. In the action a certificate by the board showing the delinquency shall be prima facie evidence of the determination of the tax or the amount of tax, of the delinquency of the amounts set forth, and of the compliance by the board with all the provisions of this part in relation to the computation and determination of the amounts.

38515. Service of process. In any action brought under this part process may be served according to the Code of Civil Procedure and the Civil Code of this state or may be served upon any agent or clerk in this state employed by any timber owner place of business maintained by the timber owner in this state. In the latter case a copy of the process shall forthwith be sent by registered mail to the timber owner at his principal or home office.

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Article 3. Judgment for Tax

38521. Request for judgment. If any amount required to be paid to the state under this part is not paid when due, the board may within three years after the amount is due file in the office of the County Clerk of Sacramento County, or any county, a certificate specifying the amount required to be paid, interest and penalty due, the name and address as it appears on the records of the board of the person liable, the compliance of the board with this part in relation to the determination of the amount required to be paid, and a request that judgment be entered against the person in the amount required to be paid, together with interest and penalty as set forth in the certificate.

38522. Entry and filing of judgment. The county clerk immediately upon the filing of the certificate shall enter a judgment for the people of the State of California against the person in the amount required to be paid, together with interest and penalty as set forth in this certificate. The county clerk may file the judgment in a looseleaf book entitled, "Special Judgments for State Timber Yield Tax."

38523. Abstract of judgment; lien. An abstract of the judgment or a copy may be filed for record with the county recorder of any county. From the time of the filing the amount required to be paid together with interest and penalty set forth constitutes a lien upon all the real property in the county owned by the person liable or afterward and before the lien expires acquired by him. The lien has the force, effect, and priority of a judgment lien and shall continue for 10 years from the date of the judgment so entered by the county clerk unless sooner released or otherwise discharged. The lien may within 10 years from the date of the judgment or within 10 years from the date of the last extension of the lien in the manner herein provided, be extended by filing for record in the office of the county recorder of any county an abstract or copy of the judgment and from the time of such filing the lien shall be extended to the real property in such county for 10 years unless sooner released or otherwise discharged.

38524. Execution. Execution shall issue upon the judgment upon request of the board in the same manner as execution may issue upon other judgments, and sales shall be held under such execution as prescribed in the Code of Civil Procedure.

38525. Release of property subject to lien. (a) If the board determines that the amount of tax, interest, and penalties are sufficiently secured by a lien or other property or that the release or subordination of the lien imposed under this article will not jeopardize the collection of the amount of the tax, interest, and penalties, the board may at any time release all or any portion of the property subject to the lien from the lien or may subordinate the lien to other liens and encumbrances.

(b) If the board finds that the liability represented by the lien imposed under this article, including any interest accrued thereon, is legally unenforceable, the board may release the lien.

(c) A certificate by the board to the effect that any property has been released from a lien or that the lien has been subordinated to other liens and encumbrances is conclusive evidence that the property has been released or that the lien has been subordinated as provided in the certificate.

History.—Added by Stats. 1985, Ch. 186, effective January 1, 1986.

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Article 4. Priority and Lien of Tax

38531. Priority. The amounts required to be paid by any person under this part together with interest and penalties shall be satisfied first in any of the following cases:

(a) Whenever the person is insolvent.

(b) Whenever the person makes a voluntary assignment of his assets.

(c) Whenever the estate of the person in the hands of executors, administrators, or heirs is insufficient to pay all the debts due from the deceased.

(d) Whenever the estate and effects of an absconding, concealed, or absent person required to pay any amount under this part are levied upon by process of law.

This section does not give the state a preference over any lien or security interest which was recorded or perfected prior to the time when the state records or files its lien as provided in Section 7171 of the Government Code.

The preference given to the state by this section shall be subordinate to the preferences given to claims for personal services by Sections 1204 and 1206 of the Code of Civil Procedure.

History.—Stats. 1980, Ch. 600, in effect January 1, 1981, deleted "recorded" before the first "lien" and substituted the balance of the sentence for "which attached prior to the date when the amounts required to be paid became a lien" after the first "lien" in the first sentence of the second paragraph.

38532. Recording certificate; lien. (a) If any amount required to be paid to the state under this part is not paid 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 received under Section 38431 (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.—Stats. 1980, Ch. 600, in effect January 1, 1981, added "(a)" to the beginning of the first paragraph, substituted the balance of the first paragraph after "is not paid" and added subdivision (b).

38533. Filing with Secretary of State; statewide lien. [Repealed by Stats. 1980, Ch. 600, in effect January 1, 1981.]

38534. Release of lien. [Repealed by Stats. 1980, Ch. 600, in effect January 1, 1981.]

38535. Unenforceable lien. [Repealed by Stats. 1980, Ch. 600, in effect January 1, 1981.]

38536. Certificate of release. [Repealed by Stats. 1980, Ch. 600, in effect January 1, 1981.]

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Article 5. Warrant for Collection of Tax

38541. 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 of an abstract under Section 38523 or 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.—Stats. 1980, Ch. 600, in effect January 1, 1981, substituted "the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code" for "of a certificate under Section 38532" after "38523 or" in the first sentence. Stats. 1996, Ch. 872, in effect January 1, 1997, substituted "sheriff or marshal" for "sheriff, marshal or constable" after "directed to any" in the first sentence.

38542. 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.—Stats. 1996, Ch. 872, in effect January 1, 1997, substituted "sheriff or marshal," for "sheriff, marshal or constable," after "or advance to", and substituted "his or her" for "his" after "and expenses for" in the first sentence.

38543. 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.

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Article 6. Seizure and Sale

38551. Seizure and sale. At any time within three years after any person is delinquent in the payment of any amount, the board may forthwith collect the amount in the following manner: The board shall seize any property, real or personal, of the person and sell the property, or a sufficient part of it, at public auction to pay the amount due together with any interest or penalties imposed for the delinquency and any costs incurred on account of the seizure and sale.

38552. Notice of sale. Notice of the sale and the time and place thereof shall be given to the delinquent person and to all persons who have an interest of record in the property in writing at least 20 days before the date set for the sale in the following manner: The notice shall be personally served enclosed in an envelope addressed to the taxpayer or other person at his or her last known address 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 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 taxes, interest, penalties, and costs, the name of the delinquent, and the further statement that unless the amount due is paid on or before the time fixed in the notice for the sale, the property, or so much of it as may be necessary, will be sold in accordance with law and the notice.

History.—Stats. 1990, Ch. 1528, in effect January 1, 1991, added "and to all persons . . . the property" after "person", substituted "20" for "10" after "least", added "personally served" after "shall be", added "taxpayer or other" after "addressed to the", and added "or her" after "his" in the first sentence; substituted "If not personally served, the notice" for "It" in the second sentence; deleted "also" after "shall", substituted "pursuant to . . . Code," for "for at least 10 days before the date set for the sale" after "published", and substituted "city" for "county" after "published in the" in the third sentence; substituted "or a part thereof . . . if not, in a" for "seized is to be sold. If there is no" after "property", combining the former third and fourth sentences; added "published" after "circulation"and added "in which the property or a part thereof is located" after "county" in the new third sentence; created a new fourth sentence beginning with "Notice"; added "also" after "shall", substituted "both of the following manners" for "in three public places in the county 10 days prior to the date set for the sale" after "posted in" in the fourth sentence, and added subsections (a) and (b); created new second paragraph with former fifth sentence; and added "taxes," after "including", and substituted "is" for ", interest, penalty and costs are" after "due" in the second paragraph.

38553. Bill of sale; deed. At the sale the board shall sell the property in accordance with 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 the interest or title of the person liable for the amount in the purchaser. The unsold portion of any property seized may be left at the place of sale at the risk of the person liable for the amount.

38554. Disposition of proceeds. If upon the sale the moneys received exceed the total of all amounts, including interest, penalties, and costs due the state, the board shall return the excess to the person liable for the amounts and obtain his 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 any excess pending a determination of the rights of the respective parties to the excess moneys by a court of competent jurisdiction. If for any reason the receipt of the person liable for the amount is not available, the board shall deposit the excess moneys with the Controller, as trustee for the owner, subject to the order of the person liable for the amount, his or her heirs, successors, or assigns.

History—Stats. 1996, Ch. 860, in effect January 1, 1997, substituted "to the excess moneys" for "thereto" after "the respective parties" in the second sentence, substituted "the Controller" for "the State Treasurer" after "excess moneys with" in the third sentence, and substituted "his or her" for "his" throughout the text.

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Article 7. Payment on Termination of Business and Successor's Liability*

* Article 7 added by Stats. 1985, Ch. 186, effective January 1, 1986.

38561. Withholding from purchase price by successor to cover liability. If any person liable for any amount under this part sells out his or her business or quits the business, the person's successors or assigns shall withhold sufficient of the purchase price to cover the 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.

38562. Liability of purchaser. If the purchaser of a business fails to withhold from the purchase price as required, the purchaser 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. Within 60

days after receiving a written request from the purchaser for a certificate, or within 60 days from the date the former owner's records are made available for audit, whichever period expires the later, but in any event not later than 90 days after receiving the request, or 90 days from the date of the sale of the business, whichever period expires later, 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. Failure of the board to mail the notice will release the purchaser from any further obligation to withhold from the purchase price as above provided. 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.

History.—Stats. 1991, Ch. 236, in effect July 29, 1991, added "from the" after "withhold" in the first and third sentences; substituted "last date upon" for "time within" after "The", and substituted "be not later . . . the business" for "start to run at the time the person sells out his or her business or at the time that the determination against the person becomes final, whichever event occurs later" after "enforced shall" in the fourth sentence.

38563. Certificate issuance after payment. 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 this certificate, or after the payment of the amounts is secured to the satisfaction of the board. This security is not subject to the limitations contained in Section 38501.

38564. 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. The successor may petition for reconsideration in the manner provided in Article 5 (commencing with Section 38441) of Chapter 5. 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. The provisions of this chapter with respect to the collection of any amount required to be paid under this part shall apply when the notice becomes final.

38565. Security held by the board at time of business termination. If at the time a business is discontinued the board holds security pursuant to Section 38501 in the form of cash, government bonds, or insured deposits in banks or savings and loan institutions, this 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 business is discontinued.

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Article 8. Miscellaneous Provisions

38571. Report of collections. The board shall report to the Controller the amount of collections under this part, and the Controller shall keep a record thereof.

History.—Stats. 1985, Ch. 186, in effect January 1, 1986, renumbered the section which was formerly numbered 38561.

38572. Cumulative remedies. The remedies of the state provided for in this chapter are cumulative, and no action taken by the board or Attorney General 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.

History.—Stats. 1985, Ch. 186, in effect January 1, 1986, renumbered the section which was formerly numbered 38562.

38573. Authority of the board. In all proceedings under this chapter the board may act on behalf of the people of the State of California.

History.—Stats. 1985, Ch. 186, in effect January 1, 1986, renumbered the section which was formerly numbered 38563.

38574. Liability upon termination, dissolution, or abandonment of corporate business. (a) Upon termination, dissolution, or abandonment of a corporate business, any officer or other person having control or supervision of, or who is charged with the responsibility for the filing of returns or the payment of tax, or who is under a duty to act for the corporation in complying with any requirement of this part, shall be personally liable for any unpaid taxes and interest and penalties on those taxes, if that officer or other person willfully fails to pay or to cause to be paid any taxes due from the corporation pursuant to this part.

(b) The officer or other person shall be liable only for taxes which became due during the period he or she had the control, supervision, responsibility, or duty to act for the corporation described in subdivision (a), plus interest and penalties on those taxes.

(c) For purposes of this section, "willfully fails to pay or cause to be paid" means that the failure was the result of an intentional, conscious, and voluntary course of action.

(d) The sum due for the liability under this section may be collected by determination and collection in the manner provided in Chapter 5 (commencing with Section 38401) and Chapter 6 (commencing with Section 38501).

History.—Added by Stats. 1985, Ch. 186, in effect January 1, 1986.

38575. Agreements for debt collection services. (a) For the purpose of collecting taxes, interest, additions to tax, and penalties, the board may enter into agreements with one or more private persons, companies, associations, or corporations providing debt collection services outside this state with respect to the collection of taxes, interest, additions to tax, and penalties. The agreements may provide, at the discretion of the board, the rate of payment and the manner in which compensation for services shall be paid. The compensation shall not be added to the amount required to be collected by the collection agency or provider of debt collection services from the tax debtor. The board shall provide the necessary information for the contractor to fulfill its obligation under the agreement.

(b) With the approval of the board, the contractor may, as part of the collection process, refer the tax debt for litigation by its legal representatives in the name of the board.

History.—Added by Stats. 1987, Ch. 498, in effect January 1, 1988.

38576. Written partnership agreements. The board shall not be subject to subdivisions (c) and (d) of Section 16307 of the Corporations Code unless, at the time of registration, the timber owner furnishes 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.

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38577. 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.