6701-6704

REVENUE AND TAXATION CODE
SECTION 6701-6704




6701.  The board, whenever it deems it necessary to ensure
compliance with this part, may require any person subject thereto, to
place with it any security that 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 6815. 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 the
manner that the board deems proper, or fifty thousand dollars
($50,000), whichever amount is the lesser. In case of a person who,
pursuant to Section 6070 of this part, has been given notice of
hearing to show cause why his or her permit or permits should not be
revoked, or a person whose permit or permits has been revoked or
suspended, the amount of the security shall not be greater than three
times the average liability of persons filing returns for quarterly
periods or five times the average liability of persons required to
file returns for monthly periods, or fifty thousand dollars
($50,000), 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. Security held
by the board shall be released after a three-year period in which the
person has filed all returns and paid all tax to the state or any
amount of tax required to be collected and paid to the state within
the time required. 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. Upon any sale any
surplus above the amounts due shall be returned to the person who
placed the security.



6702.  (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
6738 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 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 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 the 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 effective 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 a 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, 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 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.



6703.  (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
retailer or other person liable for any amount under this part to
withhold from such credits or other personal property the amount of
any tax, interest, or penalties due from such retailer 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 such times
as it may designate. The notice of levy shall have the same effect as
a levy pursuant to a writ of execution.
   (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 retailer
or other person liable during the period 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, mineral or
other natural rights.
   (2) Payments or credits due or becoming due periodically as a
result of an enforceable obligation to the retailer or other person
liable for the tax.
   (3) Any other payments or credits due or becoming due the retailer
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.


6704.  (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
retailer or other person liable for any amount under this part that
the person's employer withheld earnings for taxes pursuant to Section
6703 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.