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.
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