As if the economy isn’t bad enough, more than 90,000 California businesses owing back taxes could be assessed a fee on past-due amounts beginning in 2011, the California State Board of Equalization (BOE) announced Monday (Dec. 27).
Under the recently enacted Senate Bill 858, businesses will be notified of the “potential fee” beginning Jan. 1, the board announced.
In Palo Alto, 84 businesses could be affected and 72 Menlo Park businesses are on the list, a board spokeswoman said.
The new law requires the board to collect a fee on any person failing to pay owed taxes and applies to most taxes and fees collected by the board, including sales tax. The fee is intended to cover collection costs of past-due amounts.
The fee may only be imposed after the board has notified a delinquent taxpayer of the potential fee by mail. The fee amount, adjusted annually, ranges from $185 to $925 for calendar year 2011.
Businesses owing $250.01 to $2,000 would be assessed $185; medium-liabilities between $2,000.01 and $50,000 would pay $550 and anyone owing in excess of $50,000 would pay $925.
Business owners would have a 90-day grace period from the time of notification to pay taxes in full before the fee is imposed, according to the board.
Taxpayers unable to pay in full could avoid the fee if they qualify for and complete an installment-payment agreement. The board can waive the collection-recovery fee if it finds that failure to pay the taxes was due to reasonable cause and circumstances beyond the taxpayer’s control.
The fee is estimated to generate $5.2 million additional revenue from the collection of taxes, fees, and surcharges for the remainder of the 2010-11 fiscal year and $19.4 million to $22.6 million annually beginning in 2011-12, according to the board.
The five-member board of equalization collects more than $48 billion annually in taxes and fees supporting state and local government services. It hears business tax, franchise and personal income-tax appeals, and aids in the assessment and administration of property taxes. The notice is available at www.boe.ca.gov/news/pdf/l267.pdf.
The State Franchise Tax Board is nothing more than a State run Mafia. We have to adjust down to our straitened circumstances and they just keep upping the ante. Worse than loan sharks.
If I don’t pay my income taxes, IRS fines and interest start piling up quickly. Why has the government been so lax on business scofflaws?
Disgusted – I’m guessing you owe sales taxes?
I have my own business and pay sales taxes on a quarterly basis. I have no problem with penalizing late or past-due accounts.
You collect the taxes when you make your sale. There’s no excuse as to why you don’t have that money to pay the state when due.
“Why has the government been so lax on business scofflaws?”
See:
“Welfare, Corporate.”
The only reason a business does not pay a tax is that they have no money to pay it. Another tax penalty and they might just go under more rapidly. Is that what you want?
Wally:
“The only reason a business does not pay a tax is that they have no money to pay it. “
Ridiculous blanket statement. Absurd on the face of it, and more so when you think about it.
Related – see:
http://politicalhumor.about.com/od/politicalcartoons/ig/Political-Cartoons/Corporate-Cash-Reserve.htm
Most businesses will delay payments as long as possible, whether they have cash or not. American businesses (albeit large corporations that make it difficult for small businesses to compete) are sitting on over a trillion in cash.
Seems to me they’re ‘practicing’ what the State ‘preaches’ – delaying payment until they have the money or the last possible moment.
“The only reason a business does not pay a tax is that they have no money to pay it.”
You collect your payments from your customers – which includes sales tax. You divide the receipts between two accounts…accounts receivable and sales tax receivable. Sales tax receivable is an “untouchable” account – which then is paid to the state. The money should be there.
I hope Disgusted & Wallis are just trolling for the fun of it. Crescent Park Dad says it all.
CPDad – In an ideal world…
In the REAL world, the money goes where it will do the most for the company.
in the real world money that is owed to the government should not be diverted for “the company good”. I am surprised anyone would support such behavior
Sounds like tea bagger speak
W: Perhaps you didn’t read my opening post — I run my own small business. I collect sales tax and I pay it to the CA BOE on a quarterly basis.
That is the real world – budget and always perform proper accounting.
CP Dad:
Wally wants a libertarian paradise where the invisible hand of the free market rules without “guvment” interference. Like in…
….Somalia.
Ah, the invisible hand:
http://www.credoaction.com/comics/2008/07/sparky_t_penguin_private_eye_2/
http://www.credoaction.com/comics/2009/03/the_genius_of_capitalism/
http://www.salon.com/entertainment/comics/this_modern_world/2010/06/15/this_modern_world