• August 2019
    M T W T F S S
    « Jul    

A client is an LLC in WA and contracting sales reps who live in CA. Reps be representing another CA Corp. Does client register a CA Foreign Corp?

It depends if “you’re doing business in California.” The California Franchise Tax Board website provides the criteria:

“A taxpayer is doing business in California if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California or if any of the following conditions are satisfied:

  • The taxpayer is organized or commercially domiciled in California.
  • Sales, as defined in subdivision (e) or (f) of R&TC 25120, of the taxpayer in California, including sales by the taxpayer’s agents and independent contractors, exceed the lesser of $500,000 or 25 percent of the taxpayer’s total sales. For purposes of R&TC Section 23101, sales in California shall be determined using the rules for assigning sales under R&TC 25135, R&TC 25136(b) and the regulations thereunder, as modified by regulations under Section 25137.
  • Real and tangible personal property of the taxpayer in California exceed the lesser of $50,000 or 25 percent of the taxpayer’s total real and tangible personal property.
  • The amount paid in California by the taxpayer for compensation, as defined in subdivision (c) of R&TC 25120, exceeds the lesser of $50,000 or 25 percent of the total compensation paid by the taxpayer.
  • For the conditions above, the sales, property, and payroll of the taxpayer include the taxpayer’s pro rata or distributive share of pass-through entities. “Pass-through entities” means partnerships, LLCs treated as partnerships, or S corporations.

For taxable years beginning on or after 1/1/2015, the amounts are $536,446, $53,644 and $53,644, respectively.”

To have an experienced startup attorney assess your situation stop by LawTradesfor a free consultation. Our comprehensive legal marketplace can take care of any legal issue facing a company. Also, feel free to message me with any other questions you may have!