Code Section Group

Government Code - GOV

TITLE 1. GENERAL [25 - 680.4]

  ( Title 1 enacted by Stats. 1943, Ch. 134. )

DIVISION 7. MISCELLANEOUS [6000 - 7599.2]

  ( Division 7 enacted by Stats. 1943, Ch. 134. )

CHAPTER 14. State Tax Liens [7150 - 7191]

  ( Chapter 14 added by Stats. 1980, Ch. 600. )

ARTICLE 2. State Tax Liens [7170 - 7174]
  ( Article 2 added by Stats. 1980, Ch. 600. )

7170.
  

(a) Except as provided in subdivisions (b) and (c), a state tax lien attaches to all property and rights to property whether real or personal, tangible or intangible, including all after-acquired property and rights to property, belonging to the taxpayer and located in this state. A state tax lien attaches to a dwelling notwithstanding the prior recording of a homestead declaration (as defined in Section 704.910 of the Code of Civil Procedure).

(b) A state tax lien is not valid as to real property against the right, title, or interest of any of the following persons where the person’s right, title, or interest was acquired or perfected prior to recording of the notice of state tax lien in the office of the county recorder of the county in which the real property is located pursuant to Section 7171:

(1) A successor in interest of the taxpayer without knowledge of the lien.

(2) A holder of a security interest.

(3) A mechanic’s lienor.

(4) A judgment lien creditor.

(c) A state tax lien is not valid as to personal property against:

(1) The holder of a security interest in the property whose interest is perfected pursuant to Section 9308 of the Commercial Code prior to the time the notice of the state tax lien is filed with the Secretary of State pursuant to Section 7171.

(2) Any person (other than the taxpayer) who acquires an interest in the property under the law of this state without knowledge of the lien or who perfects an interest in accordance with the law of this state prior to the time that the notice of state tax lien is filed with the Secretary of State pursuant to Section 7171.

(3) A buyer in ordinary course of business who, under Section 9320 of the Commercial Code, would take free of a security interest created by the seller.

(4) Any person (other than the taxpayer) who, notwithstanding the prior filing of the notice of the state tax lien:

(A) Is a holder in due course of a negotiable instrument.

(B) Is a holder to whom a negotiable document of title has been duly negotiated.

(C) Is a protected purchaser of a security or is a person entitled to the benefits of Section 8502 or 8510 of the Commercial Code.

(D) Is a purchaser of chattel paper who gives new value and takes possession of the chattel paper in the ordinary course of the purchaser’s business or a purchaser of an instrument who gives value and takes possession of the instrument in good faith.

(E) Is a holder of a purchase money security interest.

(F) Is a collecting bank holding a security interest in items being collected, accompanying documents and proceeds, pursuant to Section 4210 of the Commercial Code.

(G) Acquires a security interest in a deposit account or in the beneficial interest in a trust or estate.

(H) Acquires any right or interest in letters of credit, advices of credit, or money.

(I) Acquires without actual knowledge of the state tax lien a security interest in or a claim in or under any policy of insurance including unearned premiums.

(J) Acquires any right or interest in property subject to a certificate of title statute of another jurisdiction under the law of which indication of a security interest on the certificate of title is required as a condition of perfection of the security interest.

(K) Is a purchaser of an instrument who would have priority under subdivision (d) of Section 9330 of the Commercial Code.

(L) Is a purchaser of investment property who would have priority under paragraph (1), (3), (4), or (5) of Section 9328 of the Commercial Code.

(M) A transferee of money who would take free of a security interest under Section 9332 of the Commercial Code.

(5) A judgment lien creditor whose lien was created by the filing of a notice of judgment lien on personal property with the Secretary of State prior to the time the notice of state tax lien is filed with the Secretary of State pursuant to Section 7171.

(Amended by Stats. 1999, Ch. 991, Sec. 45.3. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991.)

7170.5.
  

Notwithstanding Section 7170, as between competing state tax liens or as between a state tax lien and a federal lien described in Section 2100 of the Code of Civil Procedure, the lien that first comes into existence has priority over the lien that later comes into existence; and this priority is not affected by the recording or filing pursuant to Section 7171 or pursuant to Title 7 (commencing with Section 2100) of Part 4 of the Code of Civil Procedure, of a notice of either or both of the liens.

(Added by Stats. 1980, Ch. 600.)

7171.
  

(a) With respect to real property, at any time after creation of a state tax lien, the agency may record in the office of the county recorder of the county in which the real property is located a notice of state tax lien.

(b) With respect to personal property, at any time after creation of a state tax lien, the agency may file a notice of state tax lien with the Secretary of State pursuant to Chapter 14.5 (commencing with Section 7220).

(c) (1) The notice of state tax lien recorded or filed pursuant to subdivision (a) or (b) shall include all of the following:

(A) The name and last known address of the taxpayer.

(B) The name of the agency giving notice of the lien.

(C) The amount of the unpaid tax.

(D) A statement that the amount of the unpaid tax is a lien on all real or personal property and rights to that property, including all after-acquired property and rights to property, belonging to the taxpayer.

(E) A statement that the agency has complied with all of the provisions of the applicable law for determining and assessing the tax.

(2) Notwithstanding paragraph (4) of subdivision (b) of Section 27390, the transmission, filing, recording, and indexing of notices of state tax liens recorded or filed pursuant to subdivision (a) or (b), and all documents that relate to or affect those liens, including, but not limited to, a release, an extension, or a subordination, by electronic or magnetic means using computerized data processing, telecommunications, the other similar information technologies available to the filing offices shall be permitted. A facsimile signature that complies with the requirements of paragraph (2) of subdivision (b) of Section 27201 shall be accepted on any document relating to a state tax lien filed or recorded pursuant to this paragraph.

(d) If the notice of state tax lien recorded in any county reflects an out-of-state address as the last known address of the taxpayer, the agency shall pay the fees required by Sections 27361, 27361.2, 27361.4, and 27361.8.

(e) The agency recording a notice of state tax lien pursuant to subdivision (d) may collect from the taxpayer, in any manner provided by law for the collection of the tax, the cost of recording.

(Amended by Stats. 2006, Ch. 423, Sec. 1. Effective September 22, 2006.)

7172.
  

(a) A state tax lien continues in effect for 10 years from the date of its creation unless it is sooner released or otherwise discharged, and is extinguished 10 years from the date of its creation unless a notice of state tax lien is recorded or filed as provided in Section 7171.

(b) When a notice of a state tax lien is recorded or filed as provided in Section 7171 before the lien is extinguished pursuant to subdivision (a), the lien continues in effect for 10 years from the date of recording or filing the notice of state tax lien unless it is sooner released or otherwise discharged, and is extinguished 10 years from the date of recording or filing the notice of state tax lien unless it is extended as provided in subdivision (c).

(c) A state tax lien may, within 10 years of the date of the recording or filing of the notice of state tax lien or within 10 years of the date of the last extension of the lien, be extended by recording in the office of the county recorder of any county or filing with the Secretary of State a new notice of state tax lien as provided in Section 7171, and from the time of such recording or filing the lien is extended for 10 years unless sooner released or otherwise discharged.

(Added by Stats. 1980, Ch. 600.)

7173.
  

(a)  If the taxpayer is a party to an action or special proceeding in which the taxpayer may become entitled to property or a money judgment, a state tax lien extends to the taxpayer’s cause of action and any judgment in favor of the taxpayer subsequently procured in the action or proceeding. Notice of the lien shall be given to all parties who, prior thereto, have made an appearance in the action or proceeding. The lien has priority from the time of filing of the notice in the action or proceeding.

(b) No compromise, dismissal, settlement, or satisfaction shall be entered into by or on behalf of the taxpayer with any other party, lienor, or intervenor in the action or proceeding without the consent of the agency unless the lien is sooner released or otherwise discharged; but, until a person receives notice of the lien under subdivision (a) or has actual notice of the lien, the rights of the person are not affected by this subdivision.

(c) The court clerk shall endorse upon the judgment recovered in the action or proceeding a statement of the existence of the lien and the time of the filing of the notice in the action or proceeding. Any abstract issued on the judgment shall include a statement of the lien in favor of the agency.

(Amended by Stats. 1982, Ch. 497, Sec. 99. Operative July 1, 1983, by Sec. 185 of Ch. 497.)

7174.
  

(a) If the agency determines that the amount of tax, interest, and any penalty are sufficiently secured by a lien on other property or that the release or subordination of the state tax lien will not jeopardize the collection of the amount of the tax, including interest and penalty, the agency may at any time release all or any portion of the property subject to the state tax lien from the lien or may subordinate the state tax lien to other liens and encumbrances.

(b) If the agency finds that the liability represented by the state tax lien, including any interest accrued thereon, is legally unenforceable, the agency may release the lien.

(c) If the agency has recorded a notice of state tax lien as provided in Section 7171 and the liability represented by the lien, including any interest and penalty, has been satisfied in full:

(1) If the agency is other than the Controller or the State Board of Equalization, the agency shall, not later than 40 days after the liability is satisfied, record a certificate of release in the office of the county recorder where the notice of state tax lien is recorded.

(2) In the case of the Controller or the State Board of Equalization, the agency shall, not later than 40 days after the liability is satisfied, do one of the following:

(A) Record a certificate of release in the office of the county recorder where the notice of state tax lien is recorded.

(B) Deposit in the mail or otherwise deliver to the taxpayer a certificate of release.

(d) If the agency records a certificate of release under subdivision (c) or files a certificate of release under subdivision (e), the cost of recording or filing is an obligation of the taxpayer and may be collected from the taxpayer in any manner provided by law for the collection of the tax.

(e) If the agency has filed a notice of state tax lien with the Secretary of State as provided in Section 7171 and the liability represented by the state tax lien, including any interest and penalty, has been satisfied in full, the agency shall, not later than 40 days after the liability is satisfied, do one of the following:

(1) File a certificate of release with the Secretary of State.

(2) Deposit in the mail or otherwise deliver a certificate of release to the taxpayer.

(f) For the purpose of subdivisions (c) and (e), if payment is made by check, the 40-day period does not commence to run until the check has been paid by the financial institution upon which it was drawn.

(g) A certificate by the agency to the effect that any property has been released from a state tax lien or that the lien has been subordinated to other liens and encumbrances is conclusive evidence that the property has been released or that the lien has been subordinated as provided in the certificate.

(h) If the certificate of release recorded pursuant to subdivisions (a), (b), and (c) reflects an out-of-state address as the last known address of the taxpayer, the agency shall pay the fees permitted by Sections 27361, 27361.2, 27361.4, and 27361.8.

(Amended by Stats. 1987, Ch. 868, Sec. 3.)

GOVGovernment Code - GOV2.