LLC Tax Refund Settlement California

LLC Tax Refund Settlement California

Claim Form Deadline: July 5, 2022

Estimated Payout: Varies

Proof required: No

Method of payment: Mailed Check

What's This Settlement About?

A proposed class action settlement has been reached against the California Franchise Tax Board, also known as the FTB. The settled class action lawsuit challenged LLC fees imposed on business owners in California by the FTB. Specifically, fees that were charged to California LLCs from 1994 to 2006.

Under a statute that was administered by the California FTB, LLCs had to pay an annual fee based on their worldwide total income, regardless of whether some or all of that income was derived from activities outside of California. Once the class action lawsuit was filed, the court decided this law was unconstitutional and unfair to LLCs and their proprietors whose income was partially or wholly derived from activities outside of California. The class action settlement aims to refund the unfair and unconstitutional portion of the taxes levied for international and out of State revenue.

How Do I Qualify?

All LLCs that have received their income from business operations solely within California, or within and without California, or solely without California, that have paid the FTB tax and filed timely claims for a tax refund of the levy, that have had their claim for a refund denied. For more details, please read the FAQ on the official class action administration website.

What Can I Get?

Assuming the court provides a final approval for the settlement, a $22 million Settlement Fund will be created. After attorneys' fees and services the net settlement fund will be at least an estimated $15 million and will be distributed to Class Action Members who submit valid claims. While Class Members who can support their claims with documentation will receive a higher payment per claim than those who cannot, documentation will not be required to be eligible for a refund.

How Do I File a Claim?

You can submit claim form either online or by mail by July 5, 2022 and send it postmarked to:

FTB LLC Tax Settlement Administrator
1650 Arch Street
Suite 2210
Philadelphia, PA 19103

The Court will hold a hearing at 10:00 a.m. on August 2, 2022.

Claim Form Website: FTB LLC Tax

Submit Claim Here

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