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Tag Archive for Barbara Riggs

Are You Inadvertently Doing Business In California?

LLC Members And Partners – The Franchise Tax Board Says You Are Doing Business In California…  Are You?

Effective January 1, 2011, California defines “doing business” in the state under Cal. Rev. & Tax Cd. §23101 as any active business having any of the following attributes:

•  Organized or located in California;
•  California sales exceeding the lesser of $500,000 or 25% of total sales;
•  Property  located in California exceeding the lesser of $50,000 or 25% of total property; or
•  California wages exceeding the lesser of $50,000 or 25% of total wages paid.

Sales are attributable to California if property is delivered within the state or is shipped from the state and the purchaser is the United States government or if no other state taxes the sale.

For service sold on or after January 1, 2013, California lays claim if:

•  The purchaser of the service receives benefit of the services within California such as the repair of a computer for a user in that state;
•  Sales of securities, insurance, or other intangible assets to California residents;
•  Sales, leases, rental, or licensing of California real estate or other property.

 See Cal. Rev. & Tax Cd. §25136. Read more