Section 60406 Of Article 1. Security For Tax From California Revenue And Taxation Code >> Division 2. >> Part 31. >> Chapter 7. >> Article 1.

. If, at the time a person ceases to operate under this part, the board holds a security pursuant to Section 60401 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 to be a payment on account of any liability of the taxpayer to the board on the date the person ceases to operate under this part.