ARTICLE 1.5. Notice to Withhold
(Article 1.5 added by Stats. 1959, Ch. 1040.)
30311. If any person is delinquent in the payment of the amount required to be
paid by him or in the event a determination has been made against him
which remains unpaid, the board may, not later than three years after
the payment became 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 delinquent, or
person against whom a determination has been made which remains unpaid,
or owing any debts to the delinquent or such person. 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.
(Amended by Stats. 1980, Ch. 600, Sec. 52.)
30312. 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
(Added by Stats. 1959, Ch. 1040.)
30313. All persons so notified shall forthwith after receipt of the notice advise
the board of all such 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 the 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 only
be effective with respect to an amount not in excess of two times the
amount, interest and penalty due from the person.
(Amended by Stats. 1972, Ch. 103.)
30314. 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 hereunder, 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.
(Added by Stats. 1959, Ch. 1040.)
30315. (a) 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 distributor, dealer, or other person liable for any amount
under this part to withhold from these credits or other personal property
the amount of any tax, interest, or penalties due from the distributor,
dealer, 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 the
time 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
(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 distributor, dealer, or other person
liable for the tax.
(3) Any other payments or credits due or becoming due the distributor,
dealer, 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.
(Amended by Stats. 1999, Ch. 991, Sec. 62. Effective January 1, 2000. Operative
July 1, 2001, by Sec. 75 of Ch. 991.)
30316. (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 distributor or other person liable for
any amount under this part that the person’s employer withheld earnings
for taxes pursuant to Section 30315 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.
(Added by Stats. 2000, Ch. 1052, Sec. 24. Effective January 1, 2001.)