SACRAMENTO, Calif. - New corporations and LLCs in California are no longer required to pay security deposits and will release many of the deposits collected.
Senator George Runner announced Friday that 22 deposits in Bakersfield will be released in the amount of $252,171. Those are non-cash security deposits like liquid deposits, surety bonds and personal guarantees.
The Board is authorized by state law to collect security deposits from new and existing businesses in case a business defaults on tax payments to the Board. However, of the nearly $300 million in security on deposit with the state, only a small percentage was drawn down each year—making the program no longer cost effective for the state.
Depending on the type of security released, taxpayers may need to contact their financial institution, insurance agent or broker to complete the process of cancelling their deposit.
“We’re currently writing to more than 4,000 taxpayers who made non-cash security deposits, like bonds and TCDs, to let them know they are no longer required to post security,” said Runner. “These non-cash deposits exceed more than $40 million statewide.”