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Section 40036 Of Article 3. Registration From California Revenue And Taxation Code >> Division 2. >> Part 19. >> Chapter 2. >> Article 3.
40036
. (a) When necessary to ensure compliance with this part, the
board may require any person subject to this part to place with it
the security that the board determines. Security in the form of cash,
insured deposits in banks or savings and loan institutions, or a
bond or bonds duly executed by an admitted surety insurer, payable to
the state, conditioned upon faithful performance of all of the
requirements of this part and expressly providing for the payment of
all taxes, penalties, and other obligations of the person arising out
of this part, shall be held in trust to be used solely in the manner
provided by this section. The amount of security shall be fixed by
the board, not to exceed twice the estimated average quarterly
liability of persons filing for quarterly periods, determined in the
manner that the board deems proper. 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 due to the state under this part or any
amount of tax required to be collected and paid to the state within
the time required.
(b) If, when a person discontinues business, the board holds security pursuant to this section in the form of cash or insured deposits in banks or savings and loan institutions, the security when applied to the account of the taxpayer shall be deemed a payment on any liability of the person to the board on the date the business is discontinued.
(c) This section shall not apply to a taxpayer who either has timely filed all returns and paid all tax due to the state under this part for the three consecutive years prior to the effective date of this section, or has, on or before July 31, 1998, timely filed all returns and paid all tax due to the state under this part since the taxpayer registered with the board pursuant to Section 40035. However, the board may require security from any such taxpayer who fails to remain in compliance with the reporting and payment requirements of this part subsequent to the effective date of this section.
(b) If, when a person discontinues business, the board holds security pursuant to this section in the form of cash or insured deposits in banks or savings and loan institutions, the security when applied to the account of the taxpayer shall be deemed a payment on any liability of the person to the board on the date the business is discontinued.
(c) This section shall not apply to a taxpayer who either has timely filed all returns and paid all tax due to the state under this part for the three consecutive years prior to the effective date of this section, or has, on or before July 31, 1998, timely filed all returns and paid all tax due to the state under this part since the taxpayer registered with the board pursuant to Section 40035. However, the board may require security from any such taxpayer who fails to remain in compliance with the reporting and payment requirements of this part subsequent to the effective date of this section.
