(a)
Definitions.
(1) "Electronic funds transfer"
means any transfer of funds, other than a transaction originated by check,
draft, or similar paper instrument, that is initiated through an electronic
terminal, telephonic instrument, or computer or magnetic tape, so as to order,
instruct, or authorize a financial institution to debit or credit an account.
Electronic funds transfers shall be accomplished by an automated clearinghouse
debit, an automated clearinghouse credit, or by Federal Reserve Wire
Transfer.
(2) "Automated
clearinghouse" means any federal reserve bank, or an organization established
in agreement with the National Automated Clearing House Association, that
operates as a clearinghouse for transmitting or receiving entries between banks
or bank accounts and which authorizes an electronic transfer of funds between
these banks or bank accounts.
(3)
"Automated clearinghouse debit" means a transaction in which the state, through
its designated depository bank, originates an automated clearinghouse
transaction debiting the person's bank account and crediting the state's bank
account for the amount of tax or fee. Banking costs incurred for the automated
clearinghouse debit transaction shall be paid by the state.
(4) "Automated clearinghouse credit" means an
automated clearinghouse transaction in which the person through his or her own
bank, originates an entry crediting the state's bank account and debiting his
or her own bank account. Banking costs incurred for the automated clearinghouse
credit transaction charged to the state shall be paid by the person originating
the credit.
(5) "Federal Reserve
Wire Transfer" means any transaction originated by a person and utilizing the
national electronic payment system to transfer funds through the federal
reserve banks, when that person debits his or her own bank account and credits
the state's bank account. Electronic funds transfers pursuant to Revenue and
Taxation Code sections
7659.9,
8760,
30190,
32260,
40067,
41060,
43170,
45160,
46160,
50112.7,
55050,
and
60250
may be made by Federal Reserve Wire Transfer only if payment cannot, for good
cause, be made according to subdivision (a) (1) of this regulation, and the use
of Federal Reserve Wire Transfer is preapproved pursuant to subdivision (g) of
this regulation. Banking costs incurred for the Federal Reserve Wire Transfer
transaction charged to the person and to the state shall be paid by the person
originating the transaction.
(b) Participation.
(1) Mandatory Participation. Persons with an
estimated monthly tax or fee liability of twenty thousand dollars ($20,000) or
more under the applicable part of the Revenue and Taxation Code, are required
to remit amounts due by electronic funds transfer under procedures set forth in
this regulation. To identify mandatory participants, the Board shall conduct a
periodic review of all persons with licenses, permits, or other authorization
under sections
7659.9,
8760,
30190,
32260,
40067,
41060,
43170,
45160,
46160,
50112.7,
55050,
and
60250.
The review is performed by calculating an average monthly tax or fee liability
for a twelve-month period. Persons whose average monthly tax or fee liability
equals or exceeds twenty thousand dollars will be required to remit payments by
electronic funds transfer. If a person did not engage in a covered activity
until after the beginning of the designated twelve-month review period, then
the monthly tax or fee liability will be calculated based upon the number of
months in which covered activites occurred (for example, in a calendar year
review period, if the person obtains a permit or license and begins operations
for which a tax or fee may be imposed in May, the total tax or fee liability
would be divided by eight to determine the average monthly tax or fee liability
since there are eight months remaining in the evaluation period). Persons
registering to report and pay a tax or fee for the first time, except certain
successors, will not be required to participate in the electronic funds
transfer program until a review is conducted.
A successor will be regarded as having an estimated tax or
fee liability of twenty thousand dollars ($20,000) or more per month when the
monthly tax or fee liability of the predecessor equaled or exceeded twenty
thousand dollars per month or the predecessor was a mandatory participant in
the electronic funds transfer program. If the successor purchases a portion of
a business that is required to participate in the mandatory electronic funds
transfer program (e.g. a multiple outlet business that only sells some, but not
all of its locations), the average monthly tax or fee liability of the
purchased business will be computed to determine if the successor meets the
threshold to be identified as a mandatory participant in the electronic funds
transfer program.
After review, if a person drops below the threshold for
mandatory participation, the Board shall provide notification, in writing, that
the status has been changed from mandatory participation to voluntary
participation in the electronic funds transfer program. If, at that time, a
person wishes to discontinue making electronic funds transfer payments, a
written request must be made to the Board. Payments must continue to be
remitted by electronic funds transfer until the taxpayer or feepayer is
notified by the Board, in writing, of an effective date of withdrawal from the
program. Any person who fails to comply with the mandatory participation
requirements under this section shall be liable for a penalty as provided under
the applicable Revenue and Taxation Code sections 7659.9, 8760, 30190, 32260,
40067, 41060, 43170, 45160, 46160, 50112.7, 55050, and 60250.
(2) Voluntary Participation. Any person not
meeting the criteria for mandatory participation set forth in subdivision
(b)(1) of this regulation may participate in the program on a voluntary basis.
A person must register with the Board prior to participation. If a person
wishes to discontinue making electronic funds transfer payments, a written
request must be made to the Board. Payments must continue to be remitted by
electronic funds transfer until notified by the Board, in writing, of an
effective date of withdrawal from the program.
(c) Date of Payment. Payment is deemed
complete on the date the electronic funds transfer is initiated, if the
settlement to the state's demand account occurs on or before the banking day
following the date the transfer is initiated. If the settlement to the state's
demand account does not occur on or before the banking day following the date
the transfer is initiated, payment is deemed to occur on the date settlement
occurs.
(d) Filing of Returns. In
addition to a tax or fee payment made by electronic funds transfer, a return
must be filed on or before the due date. Any person who fails to comply with
this provision shall be subject to penalty charges as provided under Revenue
and Taxation Code sections
7659.9(d),
8760(d),
30190(d),
32260(d),
40067(d),
41060(d),
43170(d),
45160(d),
46160(d),
50112.7(d),
55050(d),
and
60250(d).
(e) Failure to Pay by Electronic Funds
Transfer. Any person required to pay tax or fee by electronic funds transfer
must continue to do so until the Board advises them otherwise in writing. Any
person required to pay taxes or fees by electronic funds transfer, as set forth
in subdivision (b)(1), who does not pay through electronic funds transfer but
uses another means (e.g., pay by check), will be assessed a penalty as provided
by Revenue and Taxation Code sections
7659.9(e),
8760(e),
30190(e),
32260(e),
40067(e),
41060(e),
43170(e),
45160(e),
46160(e),
50112.7(e),
55050(e),
and
60250(e).
(f) Zero Amount Due. When no tax is due for a
given period, a zero dollar transaction must be made by electronic funds
transfer or the Board must receive written notification stating that no tax is
due for that period.
(g)
Emergencies. In emergency situations, a Federal Reserve Wire Transfer
transaction may be used to transmit a payment. A Federal Reserve Wire Transfer
is an electronic payment system used by federal reserve banks to transfer funds
instantaneously. Generally, this method of payment is not approved for
recurring transactions. Authorization must be received from the Board prior to
making a payment by Federal Reserve Wire Transfer. The person who originates
the transfer shall be responsible for any fees incurred in paying by a Federal
Reserve Wire Transfer transaction.
