The Franchise Tax Board will now begin to send out some refunds on LLC Fees paid. These fees have been challenged in three court cases. Two of these cases are still in litigation. The one case that’s been resolved is Northwest Energetic Services (NES), LLC v. Franchise Tax Board.
The NES case related specifically to a foreign (out-of-state) LLC that had registered in California with the Secretary of State but had no business in California. If you’ve filed a claim with the FTB and the FTB can determine that the LLC meets the NES criteria, then the refund(s) will be issued.
However, if the FTB can’t determine whether an LLC meets the NES criteria no refund will be issued. So if your LLC or your client’s LLC meets that criteria, then you should send the FTB the following:
* The LLC’s name, address, and the name and phone number of the managing member or designated contact person.
* The LLC’s Secretary of State file number or Franchise Tax Board temporary LLC number (for unregistered entities), and Federal Employer Identification Number.
* Taxable Year(s) involved.
* A statement that the LLC did no business in California for each of the taxable years for which the claim is being filed.If your client hasn’t filed a claim for refund but wants to, include the above information in a letter along with the statement, “This letter constitutes a claim for refund for (taxpayer’s name) – No income attributable to California,” and the amount of claim per year. Any claim for refund must be signed by a representative with power of attorney (POA) or signed by the LLC’s managing partner.
You can fax the information to the FTB at 916.845.9796. You can also mail the information to the FTB to:
ABS 389 MS: F340
Franchise Tax Board
PO Box 942867
Sacramento, CA 94267-8888
If you use FedEx or another private courier, then send it to:
ABS 389 MS: F340
Franchise Tax Board
C/O FTB Notice 2008-2
9465 Butterfield Way
Sacramento, CA 95827
The FTB has issued a notice here.