This subject is very confusing.
We are currently WA state residents end own a local business.
We are considering moving to CA.
We don't have a business there yet, but we want to start one there too.
Do we need to pay CA taxes for our WA state business income, which is only conducted in WA?
Or do the CA taxes apply to that income as well?
Do we need to pay tax for both states on one source of income?
What about income from real estate that we own in WA?
If you move to CA and become CA residents then CA will tax all your income from all sources. If you also have to pay taxes in another state on the same income then CA gives you a credit for that but of course WA doesn't have an income tax so no credit.
Once you are a CA resident then ALL your income from ALL sources from anywhere in the world is taxed to CA which includes rentals in WA. The sales taxes paid on the rental property is an expense reported on the Sch E. I highly recommend you seek local tax assistance in CA for the first tax year to be educated on the CA rules.