I run an Ebay business and have one employee in California. It is a sole proprietorship and I file a schedule C. I plan to move to Texas but will continue to have an employee in California that will handle the inventory and will ship the items from there.
I will be living and working in Texas handling other functions of the business online. Since the employee will still be in California I will still be paying payroll taxes to California.
Will I have to file and pay California income taxes since my employee is shipping inventory from there even though I will be working from Texas?
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Per the 2019 Bindley decision, a non-resident sole proprietor would owe California income tax only if they provided services to clients located within California.
https://ota.ca.gov/wp-content/uploads/sites/54/2019/08/18032402_Bindley_Decision_OTA_053019.pdf
Oh ok so basically I would owe state income taxes for any items I sold on eBay to California buyers? Thanks for the response
See Business Income (or Loss) on page 7 of this California tax publication for California's rules:
https://www.ftb.ca.gov/forms/2023/2023-1031-publication.pdf
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