If a Nevada resident’s Schedule C activities, also have CA sales, how is the net Schedule C bottom line allocated to CA? Is is strictly allocated based on CA sales, divided by total Sales? Thank you to anyone who has dealt with this.
Bill, you would apportion the California sales using the market-based sourcing rules under 18 Cal. Code Regs. 25136-2, and yes, generally the income is apportioned to CA based on CA sales over total sales. See our California Taxation of Multistate Businesses for more information.