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Moving to Texas, have employee in California. Do I pay California state income taxes?

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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3 Replies
TomD8
Level 15

Moving to Texas, have employee in California. Do I pay California state income taxes?

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

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Moving to Texas, have employee in California. Do I pay California state income taxes?

Oh ok so basically I would owe state income taxes for any items I sold on eBay to California buyers? Thanks for the response 

TomD8
Level 15

Moving to Texas, have employee in California. Do I pay California state income taxes?

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

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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