The California Tax Code provides for a minimum $800 annual tax for every corporation that is "doing business" in California in a particular year. Cypress Equipment Fund XII, LLC ("Cypress LLC") was a California limited liability company acting as an investment and equipment leasing company. Cypress LLC was manager-managed (as opposed to member-managed), which meant that investors into Cypress LLC had no operational control over the company. Swart Enterprises held this 0.2% investment through at least 2010. In 2010, the California FTB determined that Swart Enterprises was "doing business" in California, and demanded that Swart Enterprises pay the $800 minimum tax -- which ultimately came to $1,106 with penalties and interest.

Source: Forbes February 23, 2017 19:04 UTC