Let's say someone work remotely at Washington for a California startup as a W-2 worker. They work 100% remotely at Washington (no short-term assignment at California). It is known that they do not need to pay California taxes for their non-ISO compensation like base salary and bonus: refer my previous question
However, this time, they are also granted with some ISO options. 2 questions:
1. They exercise the options while still at Washington after the options vest. Do they need to pay the AMT California taxes?
2. They later sell the exercised shares while still at Washington too. Do they need to pay the regular California taxes?
