California Protective Claim for Refund of Annual LLC Fee

In a recent California Superior Court case, Northwest Energetic Services, LLC v. California Franchise Tax Board (Cal. Super. Ct. No. CGC -05-437721? Mar. 3, 2006), the court held that the annual California fee based on the gross receipts of limited liability companies (LLCs) organized or doing business in California is unconstitutional. This holding does not affect the $800 minimum tax imposed on LLCs organized in or doing business in California. The Franchise Tax Board has indicated that it will appeal the court's decision.

Please click here to view a Franchise Tax Board news release setting forth the steps that taxpayers should take if they wish to file protective claims for a refund of the LLC fee for past years based on the Northwest Energetic Services, LLC case. Additional information regarding protective claims for a refund may be found on the Franchise Tax Board website at http://www.ftb.ca.gov/forms/misc/3556.html#proclaim.

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