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multi tir LLC ownership with out of state members - who fills Ca LLC returns

February 09, 2017 • Anonymous • Log In to Post Comments

I have a California LLC client.  Call it C-LLC, doing business in both California and NY.

C-LLC has both California members and one NY resident member.  The NY member is a NY LLC. Call this NY1LLC.

The NY member, NY1LLC, has just asked if they are required to file a CA LLC return and pay both the 800 LLC tax and the LLC fee on the CA source gross revenues-- which would seem to be a duplication on the LLC fee being paid.

To add a twist, if NY1LLC is owned by another NY LLC do both of these LLC's have to each file California LLC returns and each pay the $800 LLC tax?  Is the LLC Fee due from both of these LLC as well?

Some clarification would greatly be appreciated.

 

 


Comments

Yes, the NY LLC is doing business in CA because it's a member of a CA LLC. Under the Swart case, if the NY LLC is investing in the CA LLC, there is no requirement to file. HOWEVER, that case is not final and the FTB will likely appeal.

One more thing to note, in computing its LLC fee the NY LLC can exclude income from the CA LLC that has already been subject to the fee.  See R&TC Sec. 17942.

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