California Issues Legal Rulings Addressing Nexus and

The California Franchise Tax Board (FTB) has recently issued its first legal rulings in
almost 24 months, dealing with complex nexus and apportionment concepts. In the first
ruling, the FTB concluded through a series of examples that a business entity with a
membership interest in a multiple-member limited liability company (MMLLC) that is
classified as a partnership for tax purposes may have California return filing requirements
and may be subject to the LLC tax and fee based solely upon the actions of the MMLLC.1
In the second ruling, the FTB concluded that proceeds from asset sales transactions which
took place during a Chapter 11 bankruptcy plan of reorganization were not “occasional
sales” and were includible in the taxpayer’s sales factor.2

Click here to continue reading…CA-Legal-Rulings-2014-01-and-02-9-9-14

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