California State Board of Equalization will Accept IOUs for Payment of Sales Taxes
The California State Board of Equalization (“SBE”) announced on July 21, 2009, that it will accept California State issued registered warrents, or IOUs, as payment of taxes from certain vendors doing business with the State of California.
As has been recently publicized, the State of California has been issuing IOUs (or registered warrants) to its vendors who provide goods and services to the State of California because it does not has sufficient cash to pay all State obligations. While the law does not currently require that the SBE accept these IOUs as payments of taxes, the SBE position is that it also does not prohibit the SBE from accepting the State issued IOUs.
If a taxpayer wishes to make a payment with a State issued IOU, then the taxpayer must include their IOU as payment with a return. The State-issued registered warrant must be signed over and/or be payable to the SBE.