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2520-2523 Special Collection Procedures: ABC Liquor License Transfer

2520. PROGRAM DEFINITION AND PERTINENT LAWS
Rule 68.2 of the Department of Alcoholic Beverage Control (ABC) states that the department may refuse to transfer any liquor license limited under Article 2 (commencing with §23815), Chapter 5, Division 9, Business and Professions Code, or any on-sale general seasonal license while delinquent city and/or county unsecured personal property taxes exist against the transferor, pursuant to Business and Professions Code section 24049, provided that notice of such delinquency has been filed with the department.

NOTE:  For transfers that occur after the lien date, bills should be prepared based on estimated amounts and payment should be sought within the escrow period.

2521. NOTIFICATION OF DELINQUENCY TO ABC
Standard forms approved by ABC must be used in establishing the claim. The phraseology of the forms, modified for city or county usage, is set forth in the forms at the end of this manual. The forms may be reproduced using the tax collector's letterhead.

Submit form SCO 2-16, in duplicate, to the Department of Alcoholic Beverage Control, 3927 Lennare Drive, Sacramento, California  95834, when a delinquency exists.  When an application for transfer is filed, ABC returns the duplicate to the taxing agency, along with all pertinent information. This hold procedure does not violate the bankruptcy automatic stay.

2522. NOTIFICATION OF ESCROW HOLDER
Within 30 days after ABC returns the duplicate of form SCO 2-16, the taxing agency must send form SCO 2-17 to the escrow holder, making demand for the amount due the taxing agency. Copies of this demand are sent to the transferor, the transferee, ABC’s Sacramento office, and ABC’s district office.

2523. RELEASE FOR LIQUOR LICENSE TRANSFER
Form SCO 2-18 in duplicate must accompany form SCO 2-17. This is a notice from the escrow holder that the delinquent tax has been paid and that the withhold is to be released. Upon payment to the taxing agency, the escrow holder forwards the original of this form to ABC in Sacramento.

If the total of all agencies' tax holds exceeds the sale price, the taxing agency with the largest lien prorates the taxes for all agencies with holds. Be sure to include all bills, current and delinquent, plus an estimate for any bills due after the lien date but not yet assessed. Be sure penalty amounts are current to the distribution date. Generally, the county holds are the smallest amounts and suffer a great reduction in pro rata situations.