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CA Tells Franchisees to Withhold 7% from Franchisor Royalties
On the heels of the New York State Department of Taxation and Finance's recent move to require annual information returns from franchisors to help the state catch New York franchisees who underreport sales taxes, the California Franchise Tax Board (the “FTB”) recently told California franchisees to begin withholding 7% of all lease and royalty payments to out-of-state franchisors (“Nonresident Franchisors”) that exceed $1,500 per calendar year. In a Sept. 24, 2009 memorandum, the FTB explained franchisee withholding responsibilities and directed California franchisees to begin paying withheld amounts to the state if their Nonresident Franchisor is not qualified to do business in California.
The FTB's directive is straightforward, but there is more than meets the eye. California's apparent goal is to induce all Nonresident Franchisors to qualify to do business in California and begin filing state income tax returns. Nonresident Franchisors, forced to choose between qualifying to do business in California or accepting a 7% withholding of fees by their California franchisees, are scrambling to figure out which option leaves them better off. Not surprisingly, franchise organizations, like the International Franchise Association, are openly questioning the FTB's authority to impose the unorthodox withholding requirement.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Transfer Tax Implications on Real Property Leases
The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.