SECTIONS 7486-7487 - California Statutes

REVENUE AND TAXATION CODE

SECTION 7486-7487

7486. The board, whenever it deems it necessary to ensure
compliance with this part or any rule or regulation adopted under
this part, may require any person to deposit with it any security as
it may determine appropriate. The amount of the security shall be
fixed by the board but shall not be more than three times the
estimated average monthly tax liability of the person. The total
amount of security shall not be in excess of one million dollars
($1,000,000) where the person has established to the satisfaction of
the board that this security, together with property to which the
lien imposed by Section 7872 attaches, is sufficient security to
ensure payment of taxes equivalent to three times the estimated
average monthly tax liability of the person. The amount of the
security may be increased or decreased by the board at any time. Any
security in the form of cash or insured deposits in banks and savings
and loan institutions shall be held by the board in trust to be used
solely in the manner provided for in this section and Section 7487.
Any security in the form of a bond or bonds shall be duly executed by
an admitted surety insurer, payable to the state, conditioned upon
faithful performance of all 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. 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.

7487. If, at the time a person ceases to operate under this part,
the board holds a security pursuant to Section 7486 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 Controller on the date the person ceases to operate under this
part.