Linden Labs; A Californian Corporation & Taxes

No doubt the corporate lawyers for Linden Labs are aware of it, but just in case they aren't (I only just got around to reading it myself) have then read the "California Tax Letter" Vol. 28, No. 4 - April 1st 2006. I talks about a recent court case that made taxing of California Corporation that do business outside of California unconstitutional. Linden is based in California, and I assume its servers are as well, they do have client outside of California though, and do a large part of their business over the internet, which some courts have deemed as being under federal laws and requirements.



Court finds California’s LLC fee unconstitutional
http://www.caltax.com/SpidellWeb/Features/Hot+News+and+Notes/Court+finds+Californias+LLC+fee+unconstitutional.htm

FTB announces dedicated address and fax for LLC protective claims
http://www.caltax.com/SpidellWeb/Features/Hot+News+and+Notes/FTB+announces+dedicated+address+and+fax+for+LLC+protective+claims.htm

In short, California currently taxes corporations based on how much business they do, but assumes all the business was done in California, its not quantified at, all, then other states tax you for the same business. The judge in the referenced case says this is a no-no, so Linden Labs might be due a refund for fiscal years 2001-2005.

Of course, an LLC is just one type of Corporation that Linden Labs may or may not be, I really don't know, and this may or may not be applicable to Linden Labs as a result of that. But then, law is a matter of interpretation, and sometimes if the possible benefits are large enough you just run with it. Eh But I'm rambling...

So yah, just a FYI (Pass it on to legal)...

I'll pass it on, ZATZAi.