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California OTA Rejects FTB’s 0.2 Percent Bright-Line Nexus Standard for Out-Of-State Minority Interest LLC Members

The California Office of Tax Appeals (OTA)—in a 3-0 pending precedential opinion granting the Appeal of Jali, LLC—has rejected the Franchise Tax Board’s (FTB) 0.2 percent ownership threshold as the new bright-line standard for determining whether an out-of-state LLC member is actively “doing business” (and thereby required to file and…