2019 “doing business” thresholds - Spidell

2019 “doing business” thresholds


An out-of-state corporation, LLC, or partnership is considered to be doing business in California during the year if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California under R&TC §23101(a), or if, for the 2019 taxable year, it satisfies one of these tests:1

  • The entity is organized or commercially domiciled in California;
  • The entity’s California sales, including sales by an agent or independent contractor, exceed the lesser of $601,967 or 25% of the entity’s total sales. “Sales” includes sales by agents and independent contractors and is the same “sales” determined under the sales factor rules using market-based sourcing;
  • The entity’s California real property and tangible personal property (valued at their original costs) exceed the lesser of $60,197 or 25% of the entity’s total real property and tangible personal property; or
  • The amount paid in California by the entity for compensation exceeds the lesser of $60,197 or 25% of the total compensation paid by the entity. Compensation is determined by using the rules for assigning payroll under R&TC §25133, as modified by 18 Cal. Code Regs. §25137.

1 R&TC §23101(b)