For taxable years beginning on or after January 1, 2007, AB 198 (Ch. 07-381) changes the basis for reportable income for determination of the LLC fee. The change bases the fee on income derived from activity in California rather than on worldwide income. (R&TC §17942)
AB 198 also provides that refunds of LLC fees resulting from the pending litigation are limited to the amount by which the fee paid exceeds the amount that would have been assessed if the fee had been apportioned. This provision applies to LLCs that file — or have filed — a timely claim for refund that asserts discrimination or unfair apportionment. (R&TC §19394 [new]) According to the FTB, this includes claims that asserted that the fee was unconstitutional.
