California Court of Appeal Affirms that LLC "Fee" Violated Commerce Clause


On January 31, 2008, the California Court of Appeal issued a decision in Northwest Energetic Services, LLC v. Franchise Tax Board (“Northwest”).[1] As described below, the court of appeal upheld in part and reversed in part the trial court’s decision,[2] which struck down California’s LLC Levy[3] under Revenue and Taxation Code former Section 17942.[4] Most importantly, the court of appeal affirmed the portion of the trial court’s decision finding that the LLC Levy was an unconstitutional tax in violation of the Dormant Commerce Clause of the United States Constitution.

(See article for more).

LOADING PDF: If there are any problems, click here to download the file.

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.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.