Taxation: electronic payments: penalties.

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Valladares (S) , Allen
Last action: 2025-08-29
Official status: August 29 hearing: Held in committee and under submission.
Effective date: Not listed

Plain English Breakdown

The bill summary and digest do not provide information on exceptions for reasons beyond the payer's control.

Changing Penalties for Not Using Electronic Payments

This law changes the penalty for not making tax payments by electronic funds transfer to $100 for the first violation and $500 for each one after that, starting in January 2026.

What This Bill Does

Changes the penalty for not using electronic funds transfer (EFT) for tax payments from a percentage of the payment amount to fixed dollar amounts.
Sets the penalty at $100 for the first time someone does not use EFT and $500 for each subsequent violation, starting in January 2026.

Who It Names or Affects

People who need to pay taxes using the Franchise Tax Board's rules.
The Franchise Tax Board which collects tax payments.

Terms To Know

Electronic Funds Transfer (EFT): A way of sending money from one bank account directly to another without writing a check or using cash.
Franchise Tax Board: The California agency that collects state taxes and enforces tax laws.

Limits and Unknowns

Does not specify what happens if someone cannot use EFT for reasons beyond their control.
It is unclear how the Franchise Tax Board will enforce these new penalties.
This bill has passed both chambers of the California Legislature but its final status, including whether it becomes law or not, is still pending.

Bill History

2025-08-29 California Legislative Information
August 29 hearing: Held in committee and under submission.
2025-08-20 California Legislative Information
August 20 set for first hearing. Placed on APPR. suspense file.
2025-07-17 California Legislative Information
Read second time and amended. Re-referred to Com. on APPR.
2025-07-16 California Legislative Information
From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (July 14).
2025-07-07 California Legislative Information
July 7 set for first hearing. Placed on REV. & TAX. suspense file.
2025-06-05 California Legislative Information
Referred to Com. on REV. & TAX.
2025-05-29 California Legislative Information
In Assembly. Read first time. Held at Desk.
2025-05-29 California Legislative Information
Read third time. Passed. (Ayes 38. Noes 0. Page 1327.) Ordered to the Assembly.
2025-05-27 California Legislative Information
Ordered to special consent calendar.
2025-05-23 California Legislative Information
Read second time. Ordered to third reading.
2025-05-23 California Legislative Information
From committee: Do pass. (Ayes 6. Noes 0. Page 1205.) (May 23).
2025-05-16 California Legislative Information
Set for hearing May 23.
2025-05-05 California Legislative Information
May 5 hearing: Placed on APPR. suspense file.
2025-04-25 California Legislative Information
Set for hearing May 5.
2025-04-23 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 872.) (April 23). Re-referred to Com. on APPR.
2025-04-04 California Legislative Information
Set for hearing April 23.
2025-04-02 California Legislative Information
Re-referred to Com. on REV. & TAX.
2025-03-26 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.
2025-03-05 California Legislative Information
Referred to Com. on RLS.
2025-02-21 California Legislative Information
From printer. May be acted upon on or after March 23.
2025-02-20 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 591, as amended, Valladares.
Taxation: electronic
funds transfer:
payments:
penalties.
Existing law requires that any payments required to be remitted to the Franchise Tax Board pursuant to specified laws be remitted by electronic funds transfer if specified conditions are met. Existing law, where payment is required to be made by electronic funds transfer but is made by some other means instead, imposes a penalty equal to 10% of the amount paid, except as provided.
Existing law requires that any payment required to be remitted to the Franchise Tax Board by an individual pursuant to specified law be remitted electronically in the form and manner prescribed by the Franchise Tax Board if specified conditions are met. Existing law, where payment is required to be made electronically but is made by some other
means instead, imposes a penalty equal to 1% of the amount paid, except as provided.
This bill
would
would, for payments made on or after January 1, 2026,
change the penalty for the above-described
violations
violation
to instead be
$100
waived
for the first
violation and $500 for each subsequent
violation.

Current Bill Text

Read the full stored bill text

Download Bill PDF