What Types of Collection Actions Can California Take Against Me If I Am in Another State?

This is a common question we get from prospective clients. I get a lot of clients who are on the East Coast for example and they're in New York or North Carolina or Florida or any one of those Atlantic states and they say "well I'm all the way over here, I've never been to California, I don't like to travel to California, I don't plan on going to California so if I owe money in California for state sales tax, for state income tax liability, what can they really do to me?" And the answer to that is they can do a whole lot to you. The reason for that is while you may not have contact with California and you may not step foot in California, probably the people that you do business with or the banking institutions that you use or the third parties that you use have some sort of nexus with California. For example, if you live on the East Coast and you use Bank of America, we have Bank of America branches in California.

California doesn't need to send a levy notice to liquidate your bank account all the way to Maine - they can just walk into the branch in California or even easier, just fax it over. And because Bank of America has nexus in California, they're obligated to follow the state's rules. When you have nexus in California, you're submitting yourself to the laws of that jurisdiction so all your financial accounts are potentially at risk. Your vendors if there's any accounts payable or any accounts receivable are potentially at risk and there's a variety of other things that are specific to different fact patterns with different businesses that may also be at risk. California doesn't have to send agents across the country to go after you. They can do so conveniently from Sacramento and with the advent of technology with the way that the state statutes are designed in California, it's very easy to file levies against taxpayers to garnish wages. Don't think that just because you're far away from the state of California that they can't do anything to harm you.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law