The tax cuts at the federal level and falling revenues post the meltdown have, as we are all aware, provoked significant revenue crises at the state level... which makes, among other things, the recall election in California understandable. As a matter of survival, state politicians are looking for ways to create new revenue sources while avoiding the accusation that they are behind tax increases. For purposes of corporate finance practitioners, the issue is the potential for increases in so-called nuisance taxes imposed on companies and individuals allegedly doing business in the state, to which many law and accounting firms have not, in the past, paid a great deal of attention.
To the extent the taxpayer has the opportunity to alter its business model, it may be advisable to do so in order to avoid fees and taxes which, while perhaps small taken in isolation, can aggregate a big number when taken cumulatively. We are interested as well in comment on severity of the penalties if the taxpayer and the state wind up disagreeing in the applicability and enforceability of the tax . and the taxpayer loses. We are quick to say that the collection of taxes is a serious business. We hope to have shortly a piece by a senior contributing editor discussing the ins and outs of withholding tax payments; interest was piqued by a recent newspaper report of a criminal proceeding which sent a chronic offender to jail for a non-payment of withholding taxes. 
I will get the ball rolling with remarks on a recent court case involving a nuisance requirement (one we have known about for a long time) in New York State for limited liability companies doing business in New York. The Court in Barklee Realty Co. v. Pataki upheld the constitutionality of a statute requiring LLCs doing business in New York to go to the expense of publishing their existence in the newspapers. The Court below agreed that:
"the required manner of publication of a limited liability company's articles is costly, unnecessary and an ineffective method of getting the desired information to members of the public. [However] it was for the Legislature alone to assess the wisdom and utility of publication as a means of disseminating such information:"
In fact, the publication requirement imposes several thousand dollars of expense on LLC's doing business in New York . unnecessary expense. However, it helps the local newspapers which are currently in a bind in the face of falling advertising. The risk in this instance of not publishing is of course, a matter for the managers' business judgment.
The Court's opinion hopefully outlines the risks . and the faux risks.
"As previously noted, failure to comply with the publication requirement would not impair the validity of any contract or act of the limited liability company; would not prevent a limited liability company from defending itself in court; and should not affect the limited liability of its members, although, from a practical standpoint, a limited liability company might be hampered in some of its dealings, particularly where an opinion of counsel that the limited liability company had been validly formed is required (Bruce A. Rich, Practice Commentaries to Article II of Limited Liability Company Law [D], p 8). Thus, section 206 has no direct bearing on the court system or the adjudication of justice, but is simply one of several steps a limited liability company must take in order to enjoy the full scope of its privilege to do business."
Barklee Realty LLC v. Pataki, (S.Ct.App.Div. Oct. 16, 2003), 2003 WL 22357739
 David Cay Johnston, "Man Who Quit Withholding Taxes Pleads Guilty," (NYTimes, Oct. 2, 2003). "Richard M. Simkanin, who stopped withholding taxes from paychecks in 1999 at Bedford,Tex, company Arrow Custom Plastics, pleads guilty to felony tax charge; admits that he knew he had to pay taxes but hoped to get away without paying; Justice Department drops 26 other charges in return for guilty plea to one felony count; Simkanin must pay $250,000 fine, will be sentenced to no more than three years in prison and remains liable for unpaid taxes."