Here are more details:
For the first couple of months of 2017 I worked as an independent contractor for Cisco Systems, but technically I worked through a third party contracting firm. I worked as a 1099 independent contractor, but this other firm is who paid me and that firm is also based in California, same as Cisco.
However, I did NOT work in California. I did all my work remotely from NC.
The notice I got says the California Franchise Tax Board thinks I should have filed a CA tax return and if I do not respond they'll send me a bill. I filled out their questionnaire and responded but even by their own "rules" I don't think I made enough gross money (I made $25,600.00 as a contractor that year) to meet their threshold.
Frankly I never knew of any situation where I'd be responsible for another state return if I never actually worked in that state. I was only paid FROM that state.
Somehow the CA FTB knows of your income (most likely CA appeared in boxes 16-18 of your 1099-Misc).
Returning the questionnaire should take care of the problem.
The CA filing requirement goes by your total income, not just your CA source income. Ref: https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.html