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State-issued IOUs accepted as payment for some taxes

July 7, 2009 |  5:54 pm

Iou

A California tax authority announced today that it would accept state-issued IOUs as payment from those who owe personal or corporate state taxes.

Taxpayers must sign the back of their IOUs and write, “Pay to the order of the Franchise Tax Board.”  The promissory note can then be mailed in with the tax bill, the board said.

The state began issuing the IOUs instead of checks to pay some of its bills July 2. State Controller John Chiang has said he will be forced to issue $3.2 billion in paper promises this month unless state officials reach a budget accord.

Gov. Arnold Schwarzenegger and the state’s legislative leaders said they were continuing to negotiate but reported no progress on efforts to balance the budget, which has a projected $26.3-billion deficit.

--Shane Goldmacher, reporting from Sacramento

Photo: One of the first registered warrants is seen after printing at the Controller's office in Sacramento, Calif., Thursday, July 2, 2009. Credit: AP Photo/Rich Pedroncelli

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