California Legislature Passes Bill Applying Retroactive LLC Fee Formula


On March 24, 2006, we posted a client alert detailing the California Franchise Tax Board’s published procedures for taxpayers wishing to file protective claims in response to Northwest Energetic Services, LLC v. California Franchise Tax Board, which held that the LLC fee codified at Cal. Rev. & Tax. Code § 17942 was an unconstitutional unapportioned “tax” rather than a fee or levy.[1] While

that case is still pending in the California Court of Appeal, the state legislature has taken action to amend the LLC fee provisions and limit existing and potential refund claims.

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