Income/Franchise:
California Superior Court Sustains that Franchise Tax Board’s P.L. 86-272 Guidance is Invalid
Case No. CGC-22-601363, Cal. Super. Ct. (2/13/24). A California superior court (Court) has denied the California Franchise Tax Board’s (FTB) motion to vacate and modify the Court’s order from December 2023 [see previously issued Multistate Tax Alert for more details on the December 2023 order], which involved a lawsuit filed by an industry trade association that challenged the validity of the FTB’s Technical Advice Memorandum (TAM) 2022-01 [see previously issued Multistate Tax Alert for more details on this FTB memo] and related FTB publication (Publication 1050) addressing the application of P.L. 86-272 to activities conducted via the internet. The Court concluded that these two publications were void because they constituted regulations that were required to be adopted, but were not adopted, in compliance with the California Administrative Procedure Act (APA). Please contact us with any questions.
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