Bill > SB591

This bill modifies the penalty structure for individuals and corporations who fail to make tax payments to the Franchise Tax Board (FTB) through electronic funds transfer as required. Currently, penalties vary based on whether the taxpayer is an individual or corporation. For payments made on or after January 1, 2026, the bill changes the penalty for individuals from a percentage-based penalty to a flat fee structure: the first violation will be waived, and subsequent violations will incur a $500 penalty. The bill maintains existing provisions requiring electronic payment for tax payments exceeding certain thresholds (such as $20,000 for estimated tax installments or $80,000 in total tax liability), but provides a more lenient approach to initial non-compliance. The legislation aims to promote fairness in the tax system by ensuring that penalties are proportionate to the violation and by giving taxpayers a first-time opportunity to correct their payment method without financial punishment. The bill reflects a legislative intent to balance regulatory compliance with taxpayer understanding and potential inadvertent mistakes in payment methods.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB591