California Gets First Suit Over Law Undoing Microsoft Tax Refund

The National Taxpayers Union is asking a California trial court to block a new state law overturning a win for Microsoft Corp. on tax treatment of dividends that multinational companies receive from foreign affiliates.

The complaint, filed Wednesday in Sacramento Superior Court, alleges the law that took effect June 27 (S.B. 167) applies retroactively in violation of the due process clauses in the US and California constitutions. It is also vague, contrary to precedent, and contradictory of other state law provisions regarding apportionment of income, the complaint alleged.

NTU members will face fees, penalties, and costs for audits ...