The complexity of California income tax laws for non-California businesses is not new. Whenever nonresident businesses have income sourced to California, California will assess income tax in many cases. Public Law (PL) 86-272 still exempts out-of-state businesses from California income tax if their California activities qualify. This generally means the business’ only connection to California is that of soliciting orders for sales of tangible personal properties, in which the orders are sent outside of California for approval and filled from inventory maintained outside of California (and not shipped into California by the out-of-state business’ own vehicles into California). Beginning with taxable years on or after January 1, 2013, all apportioning trades or businesses must assign sales of “other than tangible personal property” under the new market-based rules. Some industries will follow the special industry apportionment and allocation regulations.

Betty Williams

Betty Williams has a broad range of experience handling civil and criminal tax controversy matters including income tax, employment tax, sales and use tax, property tax and IRS, FTB, and SBE audits, protests, and appeals. She has represented clients before the U.S. Tax Court and the U.S. District Courts in California. Betty has obtained penalty abatement for numerous clients ranging from a few thousand to more than $2 million in late filing and late payment penalties. She has assisted numerous clients in the United States and abroad in the 2009, 2011 and 2012 IRS and FTB voluntary disclosure initiatives. She also represents foreign financial institutions regarding Foreign Account Tax Compliance Act (FATCA) compliance. She has experience defending criminal tax matters and negotiating plea agreements in areas such as structuring, tax evasion, and the failure to file a tax return.