Recently there was a news story about a bar in Montrose who had their liquor license revoked for nonpayment of taxes owed to the State. The story was a little confusing because the reporter used the terms, suspended and revoked interchangeably.
These are two different things.
A liquor license suspension is a temporary halt in the privilege of selling alcohol. On the other hand, when the Alcoholic Beverage Control (the ABC) revokes a license, it is gone for good. (Except if the revocation is stayed on certain conditions–that’s more like a business being on probation. If the business owner violates the law again, while on a “stayed revocation,” then the license can be revoked outright for good.)
It’s true. The State can take action when a liquor licensee is delinquent in paying either Sales Taxes or Use Taxes owed to the Board of Equalization. (The ABC, by the way, can also refuse to transfer a license if the licensee is delinquent in other types of taxes. This is all spelled out in Section 24049 of the Business & Professions Code.)
Both the State Board of Equalization and the Franchise Tax Board may seize and sell an On-Sale General License or an Off-Sale General license (full liquor licenses) if the owner is delinquent in their taxes to either of these agencies. We’re talking about sales and use tax, personal income tax or bank and corporation taxes.
When these agencies begin this process, they give written notice to the ABC and to the business owner of their intent to sell the license. (This doesn’t allow these agencies to sell alcohol, though!).
This seizure is different from revocation by the ABC because the owner may redeem his liquor license at any time prior to the date of sale by getting current with the debts owed to the taxing agencies.
What is the ABC’s involvement in all this?
When the ABC receives the request for suspension from the Board of Equalization, it posts a Notice of Suspension at the licensed business and picks up the license certificate. The ABC then puts the liquor license on indefinite suspension status. If the owner disputes the accuracy of the taxes owed, the owner will have to take up his dispute with the taxing agency–not the ABC.
When the owner has satisfied any tax requirements or debts, the taxing agency notifies the ABC that they can lift the suspension.