In a small bowl, combine the first five ingredients; set aside. In a large bowl, cream butter and sugar until light and fluffy. Add eggs, one at a time, beating well after each addition. Beat in vanilla. Combine the flour, baking powder and baking soda; add to creamed mixture alternately with sour cream just until combined. Stir in chocolate chips.
Pour a third of the batter into a greased 10-in. fluted tube pan. Sprinkle with half of the walnut mixture; repeat layers. Top with remaining batter.
Bake at 350° for 40-45 minutes or until a toothpick inserted in the center comes out clean. Cool for 10 minutes before removing to a wire rack. Dust with confectioners' sugar if desired.