The National Taxpayers Union has asked a California appeals court to void a state law that it claims is unconstitutional. The law in question, S.B. 167, was enacted in 2024 and aims to reverse an administrative tribunal victory for Microsoft Corp. that could have led to $1.3 billion in refunds for other multinational companies. The NTU argues that the law improperly applies retroactively and deviates from existing tax treatment of dividends received by multinational companies from foreign affiliates.
The group is seeking to revive its declaratory judgment action against the law, which the legislature described as a "clarification." The NTU contends that the statute's retroactive application is unlawful and that it undermines established legal principles. The case is currently before the California Court of Appeal, Third Appellate District.