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New fee for California businesses with delinquent taxes

December 28, 2010|By Marc Lifsher, Los Angeles Times

Reporting from Sacramento — More than 90,000 California businesses could be charged a new collection fee of up to $925 a year starting next week if they don't pay their back taxes to the state quickly enough, state tax officials announced Monday.

A law passed this year directs the California Board of Equalization to assess the fee on unpaid liabilities after giving the taxpayer a 90-day notice. Taxpayers can avoid the fee by settling their obligations before the 90 days are up.

The Legislature and Gov. Arnold Schwarzenegger approved the new fee to cover costs that the state incurs to collect delinquent taxes. This fee is in addition to existing penalties and interest charges that businesses already face for paying late.

The Board of Equalization collects state sales and use taxes and hears appeals on franchise and personal income disputes. The new collection fee ranges from $185 a year (for a tax bill of up to $2,000) to $925 a year (for a bill of more than $50,000).

Installment plans are available for taxpayers who can't pay the full amount immediately. The board can waive the fee if the liabilities accumulated because of factors beyond the taxpayer's control.

The Board of Equalization estimates that the new fee will boost state revenues by $5.2 million through July 30. Revenues for the entire fiscal year 2011-12 from additional collection of taxes, fees and surcharges are expected to range from $19.4 million to $22.6 million, the board said.

marc.lifsher@latimes.com

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