Beginning in January 1994, taxpayers have been able to make tax payments electronically rather than through the use of paper checks. Known as EFT payments (Electronic Funds Transfer), these payments are made by authorizing the transfer of funds from one account to another electronically. Such payments are initiated by telephone or through the use of a computer and modem.
With EFT payments, you may expect to benefit from the reduction of manual paper processing associated with it. You will also realize faster responses to your inquiries regarding the status of your tax payments, as well as cost reductions associated with check processing, postage, and reconciliation.
Electronic Funds Transfers have been used for many years by the federal government and private businesses. Direct deposit of social security payments and employees' wages are commonly made through EFT and many businesses use EFT to pay their suppliers for goods and services.
In 1988, Indiana became the first state to adopt an EFT payment program for its taxpayers. Since that time, the number of states implementing EFT programs for payment of state taxes has steadily increased.
With the passage of Senate Bill (SB) 467, (Chapter 473, Stats. 1991), California became the 24th state to implement EFT for the payment of state taxes. SB 467 required the Board of Equalization, the Employment Development Department, and the Franchise Tax Board to implement programs to collect tax payments.
In 1993, Assembly Bill 2055 (Chapter 661, Stats.1993) authorized the California Department of Insurance (CDI) to implement EFT for collection of Premium Taxes, Surplus Line Taxes, Retaliatory Taxes, and Ocean Marine Taxes, effective January 1, 1994Table of Contents