GeorgeM777
Expert Alumni

State tax filing

It appears you may be correct.  The following excerpt is from the 2021 CA Franchise Tax Board Publication 1031:

 

  • Business Income (or Loss) 

 

  • A nonresident’s income from California sources includes income from a business, trade, or profession carried on in California. If the nonresident’s business, trade, or profession is carried on both within and outside California, the income sourced to California may be based only on the business conducted within California, or may be determined by using the apportionment formula for corporations engaged in multistate businesses. 
  • California uses a mandatory market assignment method and single-sales factor apportionment to apportion business income to California. A nonresident may have California sourced income or apportionable business income if receiving income from sales or services sourced to California. Such income includes: 
  • 1. Sales of services to the extent that the purchaser of the service receives the benefit of the service in California. 
  • 2. Sales of intangible property 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. 
  • 3. Sales from the sale, lease, rental, or licensing of real property if the real property is located in California. 
  • 4. Sales from the rental, lease, or licensing of tangible personal property if the property is located in California.

It would appear from the above excerpt that CA sourced income depends on whether the services were performed within CA.   In your situation, you indicated that you performed none of your services within CA.  

 

 With regard to property, intangible property, real property, and tangible personal property that too must be located within CA or the benefit for the service must have been received within CA.  

 

@wujz2004

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