“You riding dirty?....” California Franchise Tax Board may take your refund, or take other involuntary collection actions to collect delinquent DMV vehicle registration!
The Franchise Tax Board (FTB) focuses primarily on efficient and cost-effective tax revenue collection. It makes sense for public agencies to entrust FTB to operate other revenue collection programs on their behalf.
In 1993, the Legislature passed Revenue and Taxation Code Section 10878 which transferred responsibility for collecting overdue vehicle registration fees to FTB. (I actually managed the transfer of this responsibility and staff from DMV to FTB in 1993)
The California Department of Motor Vehicles (DMV) focuses on its primary services to its customers: driver’s license certification or renewal, motor vehicle licensing, and annual vehicle registration renewals. The DMV mails nearly 33 million vehicle registration renewal notices to Californians every year. Approximately 3.73 million of these vehicle registration accounts, worth an estimated $425 million, become delinquent. DMV lacks the administrative authority to take involuntary collection actions, such as bank or wage levies. Instead, they must file actions against debtors in small claims court.
FTB exercises its administrative authority to take involuntary collection actions on behalf of DMV. In fiscal year 2016-2017, FTB handled approximately 1.35 million accounts for DMV and collected nearly $187.8 million.
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