Message Board › Nevada Corp consulting CA Companies
- This topic has 1 reply, 2 voices, and was last updated 8 months, 1 week ago by Lynn Freer.
October 30, 2019 at 11:41 am #188874AnonymousMember
If a Nevada Corporation operating/officed in Nevada consults and is paid by California companies, does that give them a California filing requirement? They do not visit the California companies in person.
Reference recommendations would be appreciated.
October 31, 2019 at 6:19 am #189349Lynn FreerParticipant
Yes the sales of services to CA customers are taxable. See Schedule R instructions and related code and regulation references.
R&TC Section 25136 requires all taxpayers to assign sales, other than sales of tangible personal property, using market assignment. The market assignment method and single-sales factor apportionment may result in California sourced income or apportionable business income if a taxpayer is receiving income from intangibles or services from California sources. Such income is determined as follows:
Sales from services are assigned to California to the extent that the purchaser of the service receives the benefit of the service in California.
Sales of intangible property are assigned to California to the extent that the intangible property is used in California. For marketable securities, the sales are in California if the customer is in California.
Sales from the sale, lease, rental, or licensing of real property are assigned to California if the real property is located in California.
Sales from the rental, lease, or licensing of tangible personal property are in California if the property is located in California.
See R&TC Section 25136 and Cal. Code Regs., tit. 18 section 25136-2, or go to ftb.ca.gov and search for market assignment, for more information.