Licenses: seizure and sale.
By giving the California Department of Tax and Fee Administration the same powers as the State Board of Equalization and the Franchise Tax Board, SB 427 seeks to enhance compliance with tax laws applicable to businesses selling alcoholic beverages. The legislation is expected to improve the state's collection of taxes owed, particularly from businesses that may otherwise abandon their licenses without settling their tax obligations, thus potentially increasing revenue for state programs funded by such tax income.
Senate Bill No. 427, introduced by Senator Nielsen, amends Section 24049.5 of the Business and Professions Code pertinent to the seizure and sale of alcoholic beverage licenses. The bill aims to strengthen existing laws that allow the State Board of Equalization and the Franchise Tax Board to seize and sell licenses of off-sale or on-sale general licensees that become delinquent in tax payments upon termination of business operations. Notably, the bill expands this authority to include the California Department of Tax and Fee Administration, thereby providing an additional layer of enforcement against non-compliant licensees.
There may be concerns regarding the implications of consolidating the power to seize and sell business licenses under more than one agency, as stakeholders could argue that this could lead to overreach or excessive enforcement. Critics may worry that the expanded authority could negatively impact small businesses, particularly those struggling financially due to tax burdens or market conditions. The balance between effective tax collection and fair treatment of businesses facing challenges will likely be a point of discussion as SB 427 moves through the legislative process.