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Owe California taxes? Pay up or lose your driving privileges

October 5, 2011

Californians who owe the state a lot of tax money better start looking into public transportation.

On Tuesday by Gov. Jerry Brown signed into law a measure that authorizes revocation of the driver's licenses of the Golden State's 1,000 most egregious tax debtors unless they set up tax repayment plans with the Franchise Tax Board or State Board of Equalization.

Happy_driver_Gabriel-Boone-iStock
Photo by Gabriel Boone/iStock

The new law is the latest effort by California to collect the estimated $6.5 billion in unpaid state income and business taxes.

Almost $155 million is owed by the top 250 people and businesses on the state delinquency list. The largest outstanding bill? $14.2 million in personal income taxes owed by a Los Angeles couple.

The California Department of Motor Vehicles will now be getting information from state tax officials about who is on the tax debt list so the licenses can be revoked.

East Coast drivers, too: On the other side of the country, a similar auto/tax bill program took effect this summer.

As a way to close Maryland's $1.3 billion budget gap, lawmakers there agreed to make driver's licenses and vehicle registrations contingent on motorists' tax compliance. The bill became law on June 1.

Tax route full of vehicular connections: There continues to be talk of other ways to leverage American's love of autos to boost revenues.

There are, of course, fuel taxes, collected at both the federal and state levels. Depending on pump prices and the political landscape, we'll hear discussions of raising gas taxes or offering drivers gas tax holidays.

Hybrid drivers got some individual income tax credits for a while. Those all expired at the end of last year, but more tax breaks are available for other alternative fuel vehicles.

Commuter taxes still cause lots of fighting between urban and suburban dwellers.

And on a larger scale, user tax advocates are big fans of by-the-mile tax proposals. Although official talk about a possible per-mile tax has been routinely shown a giant political stop sign, expect to the idea pop up again.

Let's face it. America needs money. America has around 200 million licensed drivers. Do the math.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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