For a physician who is licensed in California and seeing patients in California from NJ - is there a requirement for filing taxes in California? mosy certainly.
For nonresident independent contractors the issue is not where the independent contractor performed the services, but in what state the benefit was received. Accordingly, even if the independent contractor never sets foot in California, if he is performing services for a California-based customer, he has an economic nexus with the state and is likely doing business in California for income tax purposes. That determination falls under a totally different set of stringent, often complex rules, which typically result in the net revenue from a sale of products or services to a California customer being subject to California income taxes (though there are special exemptions for sales of products).
This often comes as a shock to nonresident independent contractors who receive an audit notice from the FTB for services performed entirely outside of California, and who thought the “never set foot” defense applies to them. It doesn’t. It only applies to employees. Moreover, the status of the vendor as independent contractor matters not only to nonresident sole proprietors, but any out-of-state business entity with sales to California customers. For more details about the economic nexus rules for independent contractors, see “Internet-Based Companies and ‘Doing Business’ in California: Be Careful What Your Website Says About...”
