REGISTERED WARRANTS (IOUs)
PURPOSE OF BULLETIN
To provide staff with information to assist taxpayers who want to pay their state tax liability with registered warrants (IOUs) issued by the State of California.
The State Controllers Office recently began issuing IOUs in late June 2009. Payment categories protected by the State Constitution, federal law, and court decisions will receive regular payments in July. All other general fund payments will be paid with IOUs. These include payments to local governments for social services, private contractors, state vendors, income and corporate tax refunds, and payments for state operations including legislative per diem.
To pay a tax liability with an IOU, endorse the IOU on the reverse side with the phrase "Pay to the order of Franchise Tax Board" and your signature, then mail it with the tax bill or estimated tax voucher. By law, we cannot deposit the IOU until it is payable, but we will credit the taxpayer's account on the date the IOU is received to stop the accrual of interest. If the IOU is not sufficient to pay the outstanding balance, taxpayers should send an additional payment for the difference. Otherwise, the taxpayers will receive a bill reflecting the new balance due.
Taxpayers may contact their financial institution for information about the financial institution's policy on paying interest.
For additional information on registered warrants visit: