Arizona v. California Update

The State of Arizona has asked the US Supreme Court to stop California’s illegal (in Arizona’s view) scheme of requiring indirect passive owners of LLCs who happen to own other LLCs that invest in California from paying California’s minimum $800 franchise tax. Because this is a dispute between the states, the proper venue for Arizona to challenge this is an original action at the Supreme Court.

Today, the Supreme Court had a one-line order on the case:

The Solicitor General is invited to file a brief in this case expressing the views of the United States.

This can be expected in the next few months. Once that brief is filed, the Supreme Court will again consider whether to hear the case; it’s probable that decision will be late this year. If the case is heard, it would likely be sometime next Spring.

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