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Business Taxes Law Guide—Revision 2024
Diesel Fuel Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 31. Diesel Fuel Tax Law
Chapter 7. Collection of Tax.
Article 1. Security for Tax
Section 60401
60401. Security. 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 60445 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 60406. 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.
History—Stats. 1996, Ch. 30, in effect January 1, 1997, substituted "any" for "such" after "deposit with it" in the first sentence and substituted "For any license … paid when due," for "The total amount of security may not be in excess of one million dollars ($1,000,000)" in the third sentence. Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, substituted "three" for "four" after "shall not be more than" in the second sentence; substituted "The" for "For any license issued pursuant to Sections 60120, 60131, 60141, and 60161, the" before "the person has established", deleted "the person has established to the satisfaction of the board that all taxes due under this part for the three year period preceding the time the security is fixed were paid when due, when" after "($1,000,000) where", and substituted "three" for "four" after "equivalent to" in the third sentence; and added the seventh sentence. Stats. 2003, Ch. 62 (SB 600), effective January 1, 2004, added "in" after "used solely in the manner provided for" in the fifth sentence.