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Registered Warrants Can Pay Your State Income Tax Bill

August 2009 - We accept California registered warrants (IOUs) as payment of current and past due personal and corporate tax obligations.

To pay a tax liability with an IOU, the taxpayer endorses the IOU on the reverse side with the phrase "Pay to the order of Franchise Tax Board” and the taxpayer’s 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, the taxpayer should send an additional payment for the difference. Otherwise, the taxpayer will receive a bill reflecting the new balance due.  

On October 2, 2009, we will redeem the IOUs we receive with the Treasurer. If a taxpayer submits an IOU after October 2, we will deposit it and then credit the account with the face value of the warrant plus applicable interest.

Taxpayers who want to receive the accrued interest from their IOUs must hold them until October 2, 2009, the date IOUs are redeemable.

A registered warrant is a “promise to pay,” with interest, that is issued by the State when there is not enough cash to meet all of the State’s payment obligations. If there is sufficient cash available, registered warrants will be paid by the State Treasurer on October 2, 2009. For more information, see the Treasurer’s website STO Registered Warrant Information or the Controller’s website California State Controller's Office: Frequently Asked Questions about Registered Warrants (IOUs).

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