FTB To Process Refunds of LLC Fees Based on Ventas Decision

The California Franchise Tax Board (FTB) has issued FTB Notice 2009-04 (May 22, 2009) (Notice) to inform taxpayers that it will process claims for refund filed by limited liability companies (LLCs) with substantially the same factual situation as Ventas Finance I, LLC v. Franchise Tax Board, where an LLC earned income within and outside of California and challenged the constitutionality of California’s LLC fee under Revenue and Taxation Code Section 17942.  The FTB has already begun processing claims for refunds from LLCs that paid the fee but did no business and earned no income attributable to activities in California, based on a California Court of Appeal ruling in Northwest Energetic Services LLC v. Franchise Tax Board.