The question is asking if you are allocating the business income. In California unless you are a QBA
(QBAs include agricultural, extractive, savings and loan, or banking or financial) you apportion using your sales income by dividing the total sales in California by the total sales and multipling the result by 100.
All trade or businesses, except those that derive more than 50% of their gross receipts from qualified business activities (QBA), must apportion their business income to California using a single-sales factor.
Single-Sales Factor Formula - R&TC Section 25128.7 requires all business income of an apportioning trade or business, other than an apportioning trade or business under R&TC Section 25128(b), to apportion its business income to California by multiplying the business income by the sales factor.
See Apportionment and allocation.
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