Contractor licenses: outstanding liabilities assessed by the California Department of Tax and Fee Administration.

Plain English Breakdown

The official source material does not provide specific details on the consequences for contractors who disagree with CDTFA's decisions or the impact on different sizes of businesses.

Contractor Licenses and Tax Liabilities

This law updates rules about contractor licenses in California, focusing on how unpaid taxes or fees assessed by the CDTFA affect license renewals.

What This Bill Does

• Updates the rules for contractors' licenses to include the California Department of Tax and Fee Administration (CDTFA) when dealing with unpaid taxes or fees.
• Allows the CDTFA to request that the registrar suspend a contractor's license if they haven't paid their taxes in full or made an agreement to pay them over time.
• Requires contractors to sign agreements allowing tax information sharing between the Franchise Tax Board and the CDTFA for enforcement purposes.
• Formally writes down any payment plans with the CDTFA.
• Gives the CDTFA permission to make rules about how they handle these situations.

Who It Names or Affects

• Contractors in California who need licenses to work.
• The California Department of Tax and Fee Administration (CDTFA).

Terms To Know

Contractor

A person or company that does construction, repair, or other building-related work for others.

License

An official document allowing someone to do a specific job or activity legally.

Limits and Unknowns

• The bill doesn't specify what happens if a contractor disagrees with the CDTFA's decision.
• It is not clear how this will affect small businesses differently from larger ones.
• There are no details on how long it takes for the registrar to act after receiving requests from the CDTFA.

Official Summary Text

SB 1165, as amended, Caballero.
Contractor licenses: outstanding liabilities assessed by the California Department of Tax and Fee Administration.
Existing law, the Contractors State License Law, establishes the Contractors State License Board and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law requires the board to appoint a registrar of contractors, as specified, to serve as the executive officer and secretary of the board. Existing law permits the registrar to suspend or refuse to issue, reinstate, reactivate, or renew a license for a failure to resolve all outstanding final liabilities, including
taxes and
any fees that may be assessed by, among others, the State Board of
Equalization, except for licensees who have
Equalization and the Franchise Tax Board. Existing law exempts from that provision the outstanding final liabilities assessed by the State Board of Equalization of a licensee who has
entered into an installment payment agreement with the State Board of Equalization, as provided.
Existing law, on July 1, 2017, transferred to the California Department of Tax and Fee Administration various duties, powers, and responsibilities of the State Board of Equalization.
This bill would
permit the registrar to suspend or refuse to issue, reinstate, reactivate, or renew a license for a failure to
resolve outstanding liabilities assessed by
update the above-described outstanding liability enforcement provisions of the Contractors State License Law to include references to
the California Department of Tax and Fee
Administration. The bill would authorize the department to request that the registrar suspend or refuse to issue, reinstate, reactivate, or renew a license unless the licensee has entered into an installment payment agreement with the department, as specified. The bill would require the department to give written notice to the licensee of that request, as provided. The bill would authorize the department to prescribe, adopt, and enforce regulations relating to the administration and enforcement of these provisions.
Administration, as specified.
The bill would require the installment payment agreements with the State Board of Equalization or the
California Department of Tax and Fee Administration
department
to be in writing.
The Contractors State License Law requires the application for a contractor’s license to include an authorization by the applicant for the Franchise Tax Board to disclose the tax information that is required for the registrar to administer the outstanding liability enforcement provisions, as specified. Existing law authorizes the Franchise Tax Board to audit these authorizations.
This bill would revise the application requirements to include a similar tax information disclosure authorization for the department, as specified. The bill would also authorize the department to audit these authorizations.

Current Bill Text

Download Bill PDF