Who Can Place a State Tax Lien?

A lien is a legal claim against property that is used as security to satisfy a debt. A state tax lien is used as collateral for a tax debt.

State Lien

A state tax lien is a general lien that a state government attaches to the debtor's property. Only the state in which the taxes are owed can impose a state tax lien.

Cause

Individuals with delinquent taxes are susceptible to state tax liens. Typically, the state will notify the debtor via a final tax bill of their intent to file a lien. If the tax is still not paid, the state files a lien with the county recorder's office.

Consequences

A state tax lien may prevent you from refinancing or selling your property until the amount owed is paid. Furthermore, the lien may appear on your credit record, negatively affecting your credit rating.

Removal

To have the lien removed, the taxpayer must pay the tax liability or resolve the issue with the state.

Credit Report Removal

The state does not control the length of time the lien stays on your credit report. You will have to contact the credit bureau directly to update your record. If the state made an error in filing the lien, it will notify the county recorder's office and the credit bureaus so the lien can be removed.

References

• State of California Employment Development Department: State Tax Lien
• State of California Franchise Tax Board: Liens