(a) Effective January 1, 2001, any service-recipient, as defined in subdivision (b), who makes or is required to make a return to the Internal Revenue Service, in accordance with subdivision (a) of Section 6041A of the Internal Revenue Code (relating to payments made to a service-provider as compensation for services) shall file with the department information as required under subdivision (c).
(b) For purposes of this section:
(1) “Service-recipient” means any individual, person, corporation, association, or partnership, or agent thereof, doing business in this state, deriving trade or business income from sources within this state, or in any manner in the course of a trade or business subject to the laws of this state. “Service-recipient” also includes the State of California or any political subdivision thereof, including the Regents of the University of California, any charter city, or any political body not a subdivision or agency of the state, and any person, employee, department, or agent thereof.
(2) “Service-provider” means an individual who is not an employee of the service-recipient for California purposes and who received compensation or executes a contract for services performed for that service-recipient within or without the state.
(c) Each service-recipient shall report all of the following information to the department, within 20 days of the earlier of first making payments that in the aggregate equal or exceed six hundred dollars ($600) in any year to a service-provider, or entering into a contract or contracts with a service-provider providing for payments that in the aggregate equal or exceed six hundred dollars ($600) in any year:
(1) The full name, address, and social security number of the service-provider.
(2) The service-recipient’s name, business name, address, and telephone number.
(3) The service-recipient’s federal employer identification number, California state employer account number, social security number, or other identifying number as required by the Employment Development Department in consultation with the Franchise Tax Board.
(4) The date the contract is executed, or if no contract, the date payments in the aggregate first equal or exceed six hundred dollars ($600).
(5) The total dollar amount of the contract, if any, and the contract expiration date.
(d) The department shall retain information collected pursuant to this section until November 1 following the tax year in which the contract is executed, or if no contract, the tax year in which the aggregate payments first equal or exceed six hundred dollars ($600).
(e) For each failure to fully comply with subdivision (c), unless the failure is due to good cause, the department may assess a penalty of twenty-four dollars ($24), or four hundred ninety dollars ($490) if the failure is the result of conspiracy between the service recipient and service provider not to supply the required report or to supply a false or incomplete report.
(f) Information obtained by the department pursuant to this section may be released only for purposes of establishing, modifying, or enforcing child support obligations under Section 17400 of the Family Code and for child support collection purposes authorized under Article 5 (commencing with Section 19271) of Chapter 5 of Part 10.2 of the Revenue and Taxation Code, or to the Franchise Tax Board for tax enforcement purposes or for the administration of this code.
(g) This section shall become operative on January 1, 2001.
(Amended by Stats. 2000, Ch. 808, Sec. 115. Effective September 28, 2000. Section initially operative January 1, 2001, by its own provisions.)
Last modified: October 25, 2018