California Court of Appeal Permits Retroactive Taxes to Remedy Unconstitutional Discrimination; Upholds Post-Amnesty Penalty

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The California Court of Appeal, First Appellate District, recently issued an opinion against the taxpayer in River Garden Retirement Home v. Franchise Tax Board, 2010 Cal. App. LEXIS 1146 (2010). The case presented two primary issues, both of which may have important consequences for California taxpayers: (1) whether the Franchise Tax Board (the “FTB”) permissibly applied California’s post-amnesty penalty in section 19777.5 of the California Revenue & Taxation Code (“CRTC”); and (2) what is the appropriate remedy when a deduction is found to unconstitutionally discriminate against out-of-state entities in violation of the dormant commerce clause.

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Published In: Business Organization Updates, Civil Remedies Updates, Constitutional Law Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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