@TomD8:
I sort of skimmed through the decision, but found the following passage interesting.
In addition, Regulation section 25120(b) provides, in pertinent part, that “[i]n general, the
activities of the taxpayer will be considered a single business if there is evidence to indicate that
the segments under consideration are integrated with, dependent upon or contribute to each other
and the operations of the taxpayer as a whole.” In short, while these authorities were established
in the context of corporations, the essence of what constitutes a unitary business—i.e.,
sufficiently interrelated and dependent in-state and out-of-state business activities that render it
appropriate for the income and losses to be combined and taxed as one unit—is equally
applicable to sole proprietorships.
Quite frankly, I find the entire market-based sourcing concept of state income taxation disturbing (being adopted more frequently applying the Wayfair decision to income tax) and nothing more than a modality for increasing a state's income tax revenue from taxpayers that have no contact with the state other than a client who happens to reside there (substantial overreaching and what if the client is only a part-time resident of the state?).
See https://www.americanbar.org/groups/taxation/publications/abataxtimes_home/17aug/17aug-pp-lipin-etal-...
