Reference library
Practice and Procedure
A working reference on how state and local tax matters actually proceed: notices, deadlines, protests, appeals, audits, collections, and refunds, written jurisdiction by jurisdiction, each stating the law as of its date. This library is drawn from practice, not from a content calendar. The questions come from the founder's practice since 2006: technical issues encountered in the field, worked to resolution at the time, and rewritten here to illustrate real-world application, with every citation re-verified against the law as of each article's date. Articles are drafted and maintained with the assistance of artificial intelligence tools under the founder's direction; the analysis, the positions, and the final review are his.
Articles
227
Jurisdictions
20
19 states, plus multistate
Topics
9
Income and franchise tax, Procedure, Residency and domicile, Sales and use tax, Local and district taxes, Nexus and registration, Water's edge and international, Unclaimed property, Gross receipts tax
Most recent law-as-of date
Oct 23, 2026
Every article states the law as of its own date
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227 articles
- Should a new investment manager and its funds be limited partnerships or LLCs for California and Texas tax purposes?In California an LLC prepays the $800 annual tax and pays a gross income fee, while a limited partnership pays only the $800.CaliforniaIncome and franchise taxNexus and registrationLaw as of Oct 23, 2026
- What makes a business engaged in business in San Francisco, and what changes when an affiliate leaves the combined group?San Francisco has eleven engaging-in-business tests; Tax Collector guidance keeps an affiliate on a combined group's return only for the months it belonged.CaliforniaGross receipts taxNexus and registrationLaw as of Oct 23, 2026
- What belongs in an investment partnership's receipts factor: gross proceeds or net gains, interest, dividends and losses?Each state builds its own receipts factor: some count gross sale proceeds, some count only net gains, and several leave dividends or securities sales out.MultistateIncome and franchise taxLaw as of Oct 23, 2026
- Which apportionment formula does a partnership use where a state offers a choice, keys the formula to an industry code, or meets a factor with a zero denominator?Each state's partnership rule sets the formula, which may differ from the corporate one; a corporate partner combining factors applies its own.MultistateIncome and franchise taxLaw as of Oct 23, 2026
- Which states require a payment with a partnership's extension, how should a tiered partnership size it, and when are the penalties abated?California, New York, Georgia and Massachusetts extend a partnership's return but not its payments; Texas and New Jersey extend only with a payment.MultistateProcedureIncome and franchise taxLaw as of Oct 23, 2026
- Which states penalize an undisclosed reportable transaction on a partnership return, and who files the disclosure?A missing reportable transaction disclosure costs a fixed sum in New York, Illinois and Minnesota and a tax-based penalty with a floor in California.MultistateProcedureIncome and franchise taxLaw as of Oct 23, 2026
- When a partnership owns a controlled foreign corporation, which partner's state return carries the Subpart F and GILTI inclusion, and whose factor?Partners, not the partnership, include a controlled foreign corporation's Subpart F and section 951A amounts; none enters the partnership's receipts factor.MultistateIncome and franchise taxWater's edge and internationalLaw as of Oct 23, 2026
- How do apportionment factors roll up through tiers of partnerships, and what happens when a lower tier's data is late, partial or missing?Each tier passes its share of lower-tier apportionment factors up, using the lower tier's year that ends within the owner's year.MultistateIncome and franchise taxProcedureLaw as of Oct 23, 2026
- Which New York filing fee does a disregarded LLC or limited partnership owe, and when does it owe none?A disregarded LLC with New York source income, gain, loss or deduction owes $25; a disregarded limited partnership owes none under $1 million of gross income.New YorkIncome and franchise taxProcedureLaw as of Oct 23, 2026
- Do New York's partnership filing fee and the New York City UBT pyramid through tiers of partnerships, and how does California's LLC fee compare?New York's partnership filing fee applies at every tier; New York City credits lower-tier tax; California's LLC fee excludes income already subject to it.New YorkIncome and franchise taxLaw as of Oct 23, 2026
- Must a California business file a property statement when the assessor asks, even if every asset was expensed?Yes: under California Revenue and Taxation Code section 441(a), the assessor can require a property statement; expensed equipment is reported at full cost.CaliforniaLocal and district taxesProcedureLaw as of Oct 17, 2026
- Where is cancellation of debt income sourced for California purposes, for a business and for a nonresident?California apportions business debt discharge income outside the sales factor; a nonresident's personal debt with no California tie has no California source.CaliforniaIncome and franchise taxLaw as of Oct 17, 2026
- Which construction costs belong in the California property tax base, and why is the cost segregation total the wrong number?California assesses new construction at full cash value on completion, not cost; a cost segregation total includes items never on the real property roll.CaliforniaLocal and district taxesLaw as of Oct 17, 2026
- Where does a digital subscription business source California receipts from individual subscribers, and what becomes of the rest?California sources subscription fees to where the subscriber benefits; fees sourced to other states stay in the sales factor denominator, with no throwback.CaliforniaIncome and franchise taxLaw as of Oct 17, 2026
- Does a single-member LLC with no receipts owe Los Angeles business tax registration, and how is the account closed?A single-member LLC owes Los Angeles business tax registration only if engaged in business in the city; passive dividends and interest alone do not count.CaliforniaLocal and district taxesNexus and registrationLaw as of Oct 17, 2026
- When is new construction assessed in California, and how is the supplemental bill computed?California assesses new construction in progress each January 1, sets a base year value on completion, and issues a prorated supplemental bill.CaliforniaLocal and district taxesLaw as of Oct 17, 2026
- How should an S corporation report a shareholder who left California mid-year, and what does a lower apportionment factor save while the shareholders are residents?On Schedule K-1 (100S), a shareholder who left California mid-year is best shown as a nonresident, with the full-year California-source share in column (e).CaliforniaIncome and franchise taxResidency and domicileLaw as of Oct 17, 2026
- What happens when a California assessor never enrolls reported construction in progress, and how long should the reserve stay?A California assessor's failure to enroll reported construction in progress leaves escaped property, assessable for four years without interest or penalty.CaliforniaLocal and district taxesProcedureLaw as of Oct 17, 2026
- Is the billing address a safe proxy for where a service customer receives the benefit?For a business customer, state market-sourcing cascades reach the billing address, if at all, only as the last step, after every other step fails.MultistateIncome and franchise taxLaw as of Oct 17, 2026
- Which state gets withholding and unemployment insurance when an employee works in more than one state?Income tax withholding follows where the work is done, with the home state as a second layer; unemployment insurance goes to one state under a four-step test.MultistateIncome and franchise taxNexus and registrationProcedureLaw as of Oct 17, 2026
- When is a seller exempt from Georgia real property withholding, and can a disregarded LLC seller rely on its owner?A nonresident seller avoids Georgia's 3 percent real property withholding only by a listed exemption or by meeting all four deemed-resident conditions.MultistateIncome and franchise taxLaw as of Oct 17, 2026
- How does Georgia credit nonresident withholding passed up through tiers of partnerships, and why does real property withholding get stuck?Georgia moves nonresident withholding up tiers on Form G2-A; the buyer remits real property withholding on Form G2-RP, and a misnamed credit can get stuck.MultistateIncome and franchise taxProcedureLaw as of Oct 17, 2026
- How does an upper-tier partnership apportion Virginia income when all it has is K-1 income from lower tiers?Virginia Department of Taxation rulings have an upper-tier partnership apportion with its share of each lower tier's property, payroll and sales.MultistateIncome and franchise taxLaw as of Oct 17, 2026
- Do nonresident withholding exemption certificates expire, who keeps them, and why will a tax-exempt partner not sign one?State withholding exemption certificates lapse by date, yearly or on changed facts; exempt partners resist certifying no unrelated business taxable income.MultistateIncome and franchise taxProcedureLaw as of Oct 17, 2026
- Do a UBT-paying partnership's New York City receipts flow to its corporate partner, and how does the UBT paid credit work?New York City has not set how a corporate partner counts receipts of a partnership paying unincorporated business tax; that method sizes the partner's credit.New YorkIncome and franchise taxLaw as of Oct 17, 2026
- Does an upper-tier partnership owe Oregon's $150 minimum tax or the corporate activity tax on lower-tier income alone?Oregon's $150 minimum tax applies only if an upper-tier partnership itself does business in Oregon; the Corporate Activity Tax excludes distributive income.OregonIncome and franchise taxLaw as of Oct 17, 2026
- What happens when a Texas combined group's extension, affiliate list and member reports disagree, and how is it put right?Texas combined group affiliate lists and reports that disagree post as missing or duplicate member filings; new schedules or amended reports cure most.TexasIncome and franchise taxProcedureLaw as of Oct 17, 2026
- How does an out-of-state entity end its Texas franchise tax account when nexus ends?An entity leaving Texas files a final franchise tax report by the 60th day after nexus ends, pays any tax, and withdraws or notifies the Comptroller.TexasNexus and registrationProcedureIncome and franchise taxLaw as of Oct 17, 2026
- Can an LLC be a Texas passive entity, and what does an upper-tier partnership owe when its lower tiers already pay?An LLC cannot be a Texas passive entity, and an upper-tier partnership outside a combined group owes no franchise tax on income from taxable lower tiers.TexasIncome and franchise taxProcedureLaw as of Oct 17, 2026
- Is the managing member of a Texas LLC doing business in Texas for franchise tax purposes?Being a Texas LLC's managing member does not alone create franchise tax nexus; the member's own Texas activity, services or $500,000 of Texas receipts decide.TexasNexus and registrationIncome and franchise taxLaw as of Oct 17, 2026
- When does an Arizona start-up subsidiary owe Arizona income tax, and should it make the multistate service provider election?A separately filing Arizona subsidiary owes at least $50 a year; the multistate service provider election needs over 85 percent of service sales out of state.ArizonaIncome and franchise taxNexus and registrationLaw as of Oct 15, 2026
- How does California tax an advance-exchange repair program when the customer gets a different refurbished unit back?California taxes an advance-exchange fee as a sale of the refurbished unit and, if the units differ in kind, adds the surrendered unit's value as a trade-in.CaliforniaSales and use taxLaw as of Oct 15, 2026
- Can a California service subsidiary of a foreign parent amend prior years to market sourcing, and where does the parent receive the benefit?Yes: a California service subsidiary can amend open years to market sourcing, to the extent its foreign parent receives the benefit outside California.CaliforniaIncome and franchise taxProcedureWater's edge and internationalLaw as of Oct 15, 2026
- How does California apportion a charter and aircraft management company, and how far does the air transportation regulation reach?California's air transportation formula (Regulation 25137-7) reaches only passenger and freight hauling; charter management fees follow general rules.CaliforniaIncome and franchise taxLaw as of Oct 15, 2026
- When a seller sells businesses every few years, is a large sale "substantial and occasional" in California, and what does the exclusion do?California drops a substantial, occasional sale's receipts from the sales factor only if outside the seller's normal course; the gain stays taxable.CaliforniaIncome and franchise taxLaw as of Oct 15, 2026
- How does a financial services business apportion its San Francisco gross receipts: customer location or payroll?Since 2025, a San Francisco financial business is taxed on 75% of receipts sourced to City customers plus 25% of group receipts apportioned by City payroll.CaliforniaLocal and district taxesGross receipts taxLaw as of Oct 15, 2026
- Are dietary supplements and meal replacements taxed as food for sales tax purposes?It depends on the state: several tax supplements more heavily than food, and a Supplement Facts or Nutrition Facts label usually decides which a product is.MultistateSales and use taxLaw as of Oct 15, 2026
- Does an intercompany service charge to an affiliate in a separate-entity market state create apportionment for the provider?Usually yes: a separate-entity market state counts an intercompany service fee in the provider's receipts, sourced where the affiliate receives the service.MultistateIncome and franchise taxNexus and registrationLaw as of Oct 15, 2026
- How does Pennsylvania tax an investment partnership and its corporate partner, and when does it impute 100 percent apportionment?Pennsylvania taxes individual partners by income class and corporate partners on apportioned business income, and reads an empty sales factor as 100 percent.MultistateIncome and franchise taxProcedureLaw as of Oct 22, 2026
- Do a lower-tier partnership's apportionment factors flow up to its partners?A lower-tier partnership's factors flow up only in aggregate-method states; separate-entity states pass up a sourced amount and entity-level states nothing.MultistateIncome and franchise taxProcedureLaw as of Oct 15, 2026
- How does a lower-tier withholding credit reach the right partner, and what restores one a state has disallowed?States credit nonresident withholding to the taxpayer named on each tier's statement; a disallowed credit returns when the issuer supplies the right document.MultistateProcedureIncome and franchise taxLaw as of Oct 15, 2026
- Does contributing real property to a wholly owned LLC trigger real estate transfer tax?Washington and New York exempt a deed to the owner's wholly owned LLC; Florida taxes it, counting any mortgage; Washington and Florida look back three years.MultistateLocal and district taxesLaw as of Oct 15, 2026
- Must a partnership withhold state income tax for its REIT partner, and how is each state's exemption claimed?Maryland and Utah exclude real estate investment trust partners, Kentucky and Ohio any corporate partner; New York and Illinois withhold absent a certificate.MultistateIncome and franchise taxProcedureLaw as of Oct 15, 2026
- Who is taxed on a partner's distribution in excess of basis in a tiered structure, and whose apportionment factors apply?The partner whose basis the cash exceeds is taxed as on a sale of its own interest: fully by its home state, elsewhere only under interest-sale rules.MultistateIncome and franchise taxResidency and domicileLaw as of Oct 15, 2026
- Do receipts no state can source leave the denominator, go to commercial domicile, or dilute every state's factor?Each state answers for itself: some exclude unsourced receipts from the denominator, a few assign them by look-through or domicile, and others leave them in.MultistateIncome and franchise taxLaw as of Oct 15, 2026
- What use tax is owed on equipment bought from a related company that charged no tax, and how is the exposure estimated?A buyer of equipment from an affiliate that charged no tax owes use tax on the price paid in California, Texas and Washington, sized from the asset register.MultistateSales and use taxProcedureLaw as of Oct 15, 2026
- Can an upper-tier partnership have New Jersey installment penalties abated when it cannot see its income in time, and what happens once the account goes to collections?New Jersey may waive late filing and payment penalties for reasonable cause, like a late K-1, but not installment interest, interest or a collection fee.New JerseyProcedureLaw as of Oct 15, 2026
- Does building a Tennessee facility through contractors create franchise and excise tax nexus before revenue?Yes: a company building its own Tennessee facility is doing business there, so franchise and excise tax returns are due before the first revenue.TennesseeIncome and franchise taxNexus and registrationLaw as of Oct 15, 2026
- Why does Tennessee assess a federally disregarded LLC for franchise and excise tax after it registers for sales tax?Tennessee franchise and excise tax disregards a single-member LLC only if its owner is a corporation; an LLC that files no return can be assessed.TennesseeProcedureIncome and franchise taxLaw as of Oct 15, 2026
- Does a cryptocurrency mining facility qualify for Tennessee's qualified data center exemption?A cryptocurrency mining site can qualify for Tennessee's qualified data center exemption with over $100 million invested and 15 net new high-wage jobs.TennesseeSales and use taxLaw as of Oct 15, 2026
- Is Tennessee use tax due on equipment stored on site before a facility is placed in service?Absent an exemption, Tennessee use tax on equipment bought for a Tennessee facility attaches when it is stored there, not when it is placed in service.TennesseeSales and use taxProcedureLaw as of Oct 15, 2026
- How should a business respond to a Texas business personal property appraisal that ignores its ledger?A Texas business protests to the appraisal review board by May 15 or 30 days after the notice, if later, and proves value from asset cost and age.TexasLocal and district taxesProcedureLaw as of Oct 15, 2026
- Is hosting or colocation of customer-owned computing equipment a taxable service in Texas?Generally no: Texas treats space, power and connectivity for machines a customer owns and runs as nontaxable, though repairs and data processing are taxed.TexasSales and use taxLaw as of Oct 15, 2026
- How does a foreign-owned company register for a Texas sales tax permit when its officers have no Social Security number?A Texas sales tax permit applicant with an owner, officer or director lacking a Social Security number files paper Form AP-201 by mail, email or fax.TexasProcedureNexus and registrationLaw as of Oct 15, 2026
- What state taxes are triggered when a corporation buys a Washington LLC?Buying 50 percent or more of a Washington LLC triggers real estate excise tax on its Washington real property; its unpaid business taxes stay with the LLC.WashingtonLocal and district taxesSales and use taxGross receipts taxLaw as of Oct 15, 2026
- How does Washington decide whether to waive a late return penalty, and should the penalty be paid with the request?Washington waives the late return penalty for causes beyond the taxpayer's control or a clean 24-month record, and the penalty is best paid with the request.WashingtonProcedureGross receipts taxLaw as of Oct 15, 2026
- When is a stay in California for a temporary or transitory purpose, and which visitors does the regulation name?California's residency regulation treats transit, vacations and brief engagements as temporary; long or indefinite work, recuperation or retirement are not.CaliforniaResidency and domicileProcedureLaw as of Oct 14, 2026
- Does registering for Colorado sales tax cover the home-rule cities?A Colorado sales tax license covers state and state-administered local taxes, but each self-collecting home-rule city requires its own license and return.ColoradoLocal and district taxesNexus and registrationSales and use taxLaw as of Oct 14, 2026
- Does Chicago's personal property lease transaction tax apply to cloud software used in Chicago?Chicago's lease transaction tax reaches cloud software as a nonpossessory computer lease at 15 percent, sourced by user location, absent an exemption.IllinoisLocal and district taxesSales and use taxNexus and registrationLaw as of Oct 14, 2026
- Does buying a business's assets trigger sales tax, and can the buyer inherit the seller's unpaid sales tax?Asset-sale equipment often bears sales tax; California, New York, Texas and Washington make a buyer skipping withholding and clearance liable for unpaid tax.MultistateSales and use taxProcedureLaw as of Oct 14, 2026
- Which states tax the transfer of a controlling interest in an entity that owns real estate, and at what threshold?A transfer of 50 percent or more of an entity owning real estate is taxed in Washington and New York, over 80 percent in Maryland, 90 percent in Pennsylvania.MultistateLocal and district taxesLaw as of Oct 14, 2026
- Can a cost-of-performance state end up sourcing service receipts to the customer's location?Sometimes: Oregon, Utah and Pennsylvania rulings read cost-of-performance rules to source service receipts by customer location; the result is not automatic.MultistateIncome and franchise taxLaw as of Oct 14, 2026
- When does a state tax an intercompany gain that the federal consolidated return defers?Separate-entity states tax a federally deferred intercompany gain at transfer; combined states adopting deferral, such as New York, defer it within the group.MultistateIncome and franchise taxLaw as of Oct 14, 2026
- How is a software license sourced for sales tax when its users sit in several states?It depends on the state: some let a business buyer certify multiple points of use and apportion tax by users, and others source the whole sale to one place.MultistateSales and use taxProcedureLaw as of Oct 14, 2026
- Does a seller owe use tax on items it gives away with a purchase?California treats a premium given with a purchase as sold; New York, Tennessee and Massachusetts make the seller the consumer, generally taxed on its cost.MultistateSales and use taxProcedureLaw as of Oct 14, 2026
- Is gain from selling regulatory credits business income or nonbusiness income?Usually business income: regulatory credits generated by operations and sold meet the functional test (California Revenue and Taxation Code section 25120(a)).MultistateIncome and franchise taxLaw as of Oct 14, 2026
- What happens to a state net operating loss when the loss company merges out of existence?States following IRC section 381 pass a merged corporation's net operating loss to the survivor; Tennessee and New Jersey (outside a combined group) do not.MultistateIncome and franchise taxProcedureLaw as of Oct 14, 2026
- Can a state apportion the gain when a parent sells a subsidiary it runs separately?Generally not: a gain on stock of a subsidiary that was not unitary with its parent is usually allocated to the parent's commercial domicile, not apportioned.MultistateIncome and franchise taxLaw as of Oct 14, 2026
- Must a state finish an unclaimed property audit within the statute of limitations?Not in Michigan: per Dine Brands (2025), an unclaimed property audit need only start within the limitation period; Washington sets a deadline for the result.MultistateUnclaimed propertyProcedureLaw as of Oct 14, 2026
- Who owes the sales tax a seller failed to collect, the seller or the buyer?The seller stays liable for tax it was required to collect, and the buyer is often liable too, unless the state imposes the tax on the seller alone.MultistateSales and use taxProcedureLaw as of Oct 14, 2026
- Where does Texas source receipts from digital downloads and licenses for franchise tax?Texas franchise tax sources digital download receipts to the payor's legal domicile and license receipts to the extent the licensed right is used in Texas.TexasIncome and franchise taxNexus and registrationLaw as of Oct 14, 2026
- Does a business with Seattle receipts owe both Washington B&O tax and Seattle's business license tax?Washington business and occupation tax and Seattle's business license tax often both apply, with no credit, but Seattle taxes only revenue over $2 million.WashingtonGross receipts taxLocal and district taxesLaw as of Oct 14, 2026
- When does a captive finance subsidiary pay California's higher financial corporation rate?A captive finance subsidiary pays California's 10.84 percent rate if over half its gross income is from dealing in money in competition with national banks.CaliforniaIncome and franchise taxLaw as of Oct 13, 2026
- How does a corporate partner source gain from selling a partnership interest in California?In California, a corporate partner apportions gain on a partnership interest serving its unitary business, or else allocates it by the partnership's factors.CaliforniaIncome and franchise taxLaw as of Oct 13, 2026
- Does a California investment partnership owe nonresident withholding or the LLC fee?A qualifying California investment partnership owes no withholding on nonresident partners' securities income, though an LLC fund can still owe the LLC fee.CaliforniaIncome and franchise taxLaw as of Oct 13, 2026
- Is a nonresident's gain from selling a partnership interest California-source income?Generally not: a nonresident's gain on a directly held partnership interest is California-source only if the interest acquired a business situs in California.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 13, 2026
- Can California tax a nonresident shareholder's share of an S corporation's gain on selling its business?Yes, a nonresident shareholder's share of a unitary multistate S corporation's sale gain is California-source to the extent it is apportioned business income.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 13, 2026
- Does P.L. 86-272 protect a foreign corporation that sells goods into California?No: California reads Public Law 86-272 as limited to interstate commerce, so it does not shield a non-U.S. seller shipping goods into California from abroad.CaliforniaNexus and registrationIncome and franchise taxLaw as of Oct 13, 2026
- Must a child live in an inherited home to keep the parent's base year value under Proposition 19?California's Proposition 19 keeps a parent's base year value on an inherited home only if a child makes it a principal residence within a year of transfer.CaliforniaLocal and district taxesLaw as of Oct 13, 2026
- Does an 18-month work assignment outside California make a California domiciliary a nonresident?A California domiciliary is a nonresident automatically only if away 546 consecutive days under an employment-related contract, with no disqualifier.CaliforniaResidency and domicileLaw as of Oct 13, 2026
- Does buying a vehicle, vessel or aircraft through an out-of-state entity still avoid California use tax after SB 1406?Senate Bill 1406 makes a shell company a California resident for vehicle, vessel and aircraft use tax if any owner is; its officers can be personally liable.CaliforniaSales and use taxProcedureLaw as of Oct 14, 2026
- Does spending more than six months, or more than nine, in California make someone a resident?Over nine months in California raises a rebuttable presumption of residence; six months or less protects only a qualifying visitor domiciled elsewhere.CaliforniaResidency and domicileLaw as of Oct 13, 2026
- Which California businesses still apportion with three factors instead of single sales?From 2025, only a California business with over half its gross business receipts from agricultural or extractive activity keeps three-factor apportionment.CaliforniaIncome and franchise taxLaw as of Oct 13, 2026
- Can a foreign-owned group that finds years of unfiled California returns still elect water's edge?A foreign-owned group cannot elect California water's edge for a year already past due, because the election requires an original, timely filed return.CaliforniaWater's edge and internationalProcedureLaw as of Oct 13, 2026
- How does Illinois decide whether someone is a resident for income tax?Illinois treats an individual as a resident if in the state for other than a temporary or transitory purpose, or domiciled there and only temporarily away.IllinoisResidency and domicileLaw as of Oct 22, 2026
- Does an equipment lessor have income tax nexus wherever its lessees take the equipment?Usually yes: equipment located in a state is the lessor's own property there, and the major taxing states treat owned property alone as nexus.MultistateNexus and registrationIncome and franchise taxLaw as of Oct 13, 2026
- When must a marketplace facilitator collect tax on third-party sellers' sales, and when is it relieved?A marketplace facilitator collects tax on facilitated sales once it meets a state's definition and threshold, and is relieved only for seller-caused errors.MultistateNexus and registrationSales and use taxLaw as of Oct 13, 2026
- Does an opportunity zone investment get the same treatment in a state that does not conform?A state not conforming to IRC section 1400Z-2, like California, taxes opportunity fund rollover gain at sale and later taxes fund gain federal law excludes.MultistateIncome and franchise taxLaw as of Oct 13, 2026
- Does a website's interactivity strip a seller's P.L. 86-272 protection?A site that only shows goods, holds a cart and takes payment keeps Public Law 86-272 protection; regular post-sale chat or data-gathering cookies can lose it.MultistateNexus and registrationLaw as of Oct 13, 2026
- Why does a residency audit look different in a statutory residency state than in a presumptive residency state?A statutory residency state can tax a nonresident as a resident on an abode and a day count alone, while other states weigh every connection.MultistateResidency and domicileLaw as of Oct 13, 2026
- If a partnership elects a pass-through entity tax, does it still withhold for nonresident owners?Unless state law coordinates the two regimes, yes: a pass-through entity tax election does not by itself end the duty to withhold for nonresident owners.MultistateIncome and franchise taxProcedureLaw as of Oct 13, 2026
- When does a remote seller's duty to collect start after one large sale crosses the threshold?A remote seller generally owes no collection on the sale that crosses a state's threshold; each state's own rule sets the later date collection begins.MultistateNexus and registrationSales and use taxLaw as of Oct 13, 2026
- Does New York tax a nonresident's wages for days worked from home in another state?Usually yes: New York treats a nonresident's day worked at an out-of-state home as a New York day unless the employer's necessity required the work there.New YorkResidency and domicileIncome and franchise taxLaw as of Oct 13, 2026
- When does an apartment make a nonresident a New York statutory resident?A nondomiciliary is a New York resident in any year in which a New York abode is kept substantially all year and more than 183 days are spent in the state.New YorkResidency and domicileLaw as of Oct 13, 2026
- How does Tennessee's single article tax and local option cap apply to sales of high-value equipment?Tennessee taxes a single article at 7 percent of the full price plus 2.75 percent from $1,600 to $3,200, and local tax usually reaches only the first $1,600.TennesseeSales and use taxLocal and district taxesProcedureLaw as of Oct 13, 2026
- When must a business register for Washington B&O, and is there a grace period for the first return?A business must register with Washington's Department of Revenue before it engages in taxable business there, and its first return has no grace period.WashingtonNexus and registrationGross receipts taxLaw as of Oct 15, 2026
- Where is self-mined cryptocurrency sourced for state tax purposes when the machines sit in one state and the owner in another?No state has published a sourcing rule for self-mined cryptocurrency: cost of performance favors the machines' state; market rules give it little or nothing.MultistateIncome and franchise taxGross receipts taxLaw as of Oct 14, 2026
- What happens when every apportionment factor is zero and a state imputes 100 percent?Imputing 100 percent when apportionment factors are zero usually misreads the return; Illinois allocates in full only income derived solely from Illinois.MultistateIncome and franchise taxProcedureLaw as of Oct 14, 2026
- How does Tennessee source a fulfillment affiliate's service fees under market-based sourcing?Tennessee sources a fulfillment affiliate's fees to the extent its deliveries for affiliated sellers reach Tennessee recipients (Rule 1320-06-01-.42).TennesseeIncome and franchise taxLaw as of Oct 14, 2026
- Are hosting fees and cost reimbursements between affiliates subject to Washington B&O tax?Usually yes: Washington business and occupation tax treats each affiliate as a separate person, so hosting fees and cost reimbursements are taxable.WashingtonGross receipts taxLaw as of Oct 14, 2026
- What is Maryland's digital advertising tax, and why is it still being fought over?Maryland's digital advertising tax runs 2.5 to 10 percent; the Maryland Tax Court held it invalid in August 2026, but it remains on the books pending review.MarylandGross receipts taxLaw as of Oct 14, 2026
- What did Proposition 19 change about California property tax reassessment?Proposition 19 limited California's parent-child reassessment exclusion to a family home or farm and let homeowners 55 and up move taxable value statewide.CaliforniaLocal and district taxesLaw as of Sep 26, 2026
- How does state and local tax fit into the ASC 740 income tax provision?Accounting Standards Codification Topic 740 covers state income-based taxes; sales, property, payroll and most gross receipts taxes fall under Topic 450.MultistateIncome and franchise taxLaw as of Oct 14, 2026
- How are service revenues sourced for state income tax: cost of performance or market?It depends on the state: most now source service receipts by market, as California does, while a minority, including Virginia, still uses cost of performance.MultistateIncome and franchise taxLaw as of Oct 14, 2026
- What is the true object test, and when does a service become a taxable sale?The true object test asks if a buyer sought the property or the service; if the service, no sales tax applies; if the property, the whole charge is taxed.MultistateSales and use taxLaw as of Oct 14, 2026
- What makes two companies one unitary business, and why does it matter?Companies are unitary when functional integration, central management and economies of scale link them; a state may tax an apportioned share of their income.MultistateIncome and franchise taxLaw as of Oct 14, 2026
- How does US sales tax differ from VAT and GST?Unlike a value added tax, US sales tax is a single-stage retail tax with no input credit, imposed separately by 45 states and the District of Columbia.MultistateSales and use taxLaw as of Oct 14, 2026
- Does Washington State tax capital gains?Yes: Washington imposes a 7 percent excise tax on individuals' long-term capital gains (RCW 82.87.040), plus 2.9 percent on gains above $1 million from 2025.WashingtonIncome and franchise taxLaw as of Sep 26, 2026
- How does California enforce unclaimed property, and is there a way back into compliance?California enforces unclaimed property with 12 percent interest, tax return questions and Attorney General action; voluntary compliance can waive interest.CaliforniaUnclaimed propertyProcedureLaw as of Oct 14, 2026
- What does Delaware's 90-day unclaimed property letter mean?Delaware's 90-day letter invites a holder into unclaimed property voluntary disclosure; with no reply in 90 days, the holder must be referred for audit.DelawareUnclaimed propertyProcedureLaw as of Oct 14, 2026
- What happens in a Delaware unclaimed property audit?Delaware unclaimed property audits often run three to seven years through outside audit firms and estimate liability where the holder's records are missing.DelawareUnclaimed propertyProcedureLaw as of Oct 14, 2026
- Which balance sheet items become unclaimed property, and when?Uncashed vendor and payroll checks and customer credits become unclaimed property after each state's dormancy period, such as five years for most in Delaware.MultistateUnclaimed propertyLaw as of Sep 25, 2026
- Which state can claim a company's unclaimed property?Under Texas v. New Jersey (1965), unclaimed property goes to the state of the owner's last known address or, absent one, the holder's state of incorporation.MultistateUnclaimed propertyLaw as of Oct 14, 2026
- What is unclaimed property, and why is it not a tax?Unclaimed property is intangible property held for an owner gone silent; states take custody rather than tax it, so nexus and Public Law 86-272 do not apply.MultistateUnclaimed propertyLaw as of Oct 14, 2026
- Does Arizona's transaction privilege tax exempt machinery and equipment used in manufacturing?Yes, within limits: Arizona allows a transaction privilege tax deduction for machinery or equipment used directly in manufacturing (Ariz. Rev. Stat. 42-5061).ArizonaSales and use taxGross receipts taxLaw as of Sep 28, 2026
- How does California treat a Section 338(h)(10) election, and where does the gain land in the sales factor?California follows a federal section 338(h)(10) election and taxes the deemed asset sale; substantial, occasional sale receipts stay out of the sales factor.CaliforniaIncome and franchise taxLaw as of Oct 13, 2026
- How does a taxpayer petition the Franchise Tax Board for alternative apportionment?A taxpayer petitions California's Franchise Tax Board Chief Counsel in writing under Revenue and Taxation Code section 25137, proposing a substitute method.CaliforniaProcedureIncome and franchise taxLaw as of Sep 28, 2026
- Does the billing address or the shipping address decide the California sales tax rate?For goods that ship, the shipping address controls California sales tax, not the billing address; district taxes follow the delivery point.CaliforniaLocal and district taxesSales and use taxLaw as of Oct 13, 2026
- Can a taxpayer use the installment method for California but not for federal tax purposes?Yes: a taxpayer that elects out of the installment method federally can still use it for California under section 17024.5(e) or 23051.5(e), on Form 3805E.CaliforniaIncome and franchise taxProcedureLaw as of Oct 13, 2026
- How does California source carried interest when a partner changes residency?California generally sources carried interest paid to a nonresident partner as a distributive share under Regulation 17951-4, whatever the holding period.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 13, 2026
- Is a federally disregarded limited partnership subject to California's $800 annual tax?No: under Franchise Tax Board Legal Ruling 2019-02, a federally disregarded limited partnership is also disregarded in California and owes no $800 annual tax.CaliforniaIncome and franchise taxLaw as of Oct 8, 2026
- What should be done when an FTB Notice of Tax Return Change is wrong?A wrong California Notice of Tax Return Change carries no protest right; the fix is to contact the Franchise Tax Board quickly, or pay and claim a refund.CaliforniaProcedureLaw as of Sep 28, 2026
- Does California tax stock options exercised after a move out of state?California usually taxes a nonqualified stock option's spread after a move, sourced by California workdays from grant to exercise or end of employment.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 14, 2026
- Does a stopover in California trigger use tax on goods in transit?A California stopover alone does not trigger use tax; property held only for shipment out of state and use solely elsewhere is excluded (Regulation 1620).CaliforniaSales and use taxLaw as of Oct 14, 2026
- What property tax relief can a California wildfire victim claim?A California wildfire victim with at least $10,000 of damage may seek reassessment under Revenue and Taxation Code section 170 or transfer base year value.CaliforniaLocal and district taxesProcedureLaw as of Oct 14, 2026
- How does Colorado tax a REIT and its taxable REIT subsidiary?Colorado taxes a real estate investment trust as a corporation, generally offset by its dividends paid deduction; its taxable subsidiary is taxed in full.ColoradoIncome and franchise taxLaw as of Oct 14, 2026
- Does registering for Idaho sales tax also cover resort city and auditorium district local option taxes?An Idaho seller's permit covers only state sales tax; resort city and auditorium district local option taxes need separate registration and returns.IdahoLocal and district taxesNexus and registrationSales and use taxLaw as of Oct 14, 2026
- Does a trust or a REIT owe Illinois replacement tax?Illinois replacement tax is 1.5 percent for non-grantor trusts and 2.5 percent for real estate investment trusts; wholly grantor trusts generally owe none.IllinoisIncome and franchise taxLaw as of Oct 14, 2026
- Who taxes an opportunity zone deferred gain when the investor changes states before recognition?Ordinarily the state of residence at recognition taxes an opportunity zone deferred gain, but a source state may claim it; California taxed it at the sale.MultistateResidency and domicileIncome and franchise taxLaw as of Oct 14, 2026
- Does a fund or investor owe New York City's Unincorporated Business Tax on trading income?New York City's unincorporated business tax generally exempts trading for one's own account, other than by dealers (Administrative Code section 11-502(c)).New YorkLocal and district taxesIncome and franchise taxLaw as of Oct 14, 2026
- Does a single-member LLC owe New York City's Unincorporated Business Tax?A federally disregarded single-member LLC is generally disregarded for New York City's unincorporated business tax, so the tax usually runs through its owner.New YorkLocal and district taxesIncome and franchise taxLaw as of Oct 14, 2026
- When does an out-of-state business owe Texas franchise tax with no Texas footprint?Texas franchise tax nexus starts when an out-of-state entity's Texas gross receipts reach $500,000, with no presence needed; many still owe no tax.TexasNexus and registrationIncome and franchise taxLaw as of Oct 17, 2026
- Where is a Texas sale consummated for local sales tax purposes?For Texas local sales tax, a sale is usually consummated at the retailer's Texas place of business, not the customer's address (Tax Code section 321.203).TexasLocal and district taxesSales and use taxLaw as of Oct 14, 2026
- How does Washington tax a cryptocurrency mining or staking operation?Washington business and occupation tax reaches cryptocurrency mining and staking rewards at 1.5 to 2.1 percent (RCW 82.04.290), valued on the date received.WashingtonGross receipts taxLaw as of Oct 14, 2026
- Whose physical presence counts as the company's?Since Scripto v. Carson (1960), contractors building a company's market in a state count as its presence there; a courtesy registration can signal nexus.MultistateNexus and registrationLaw as of Oct 14, 2026
- Where did economic nexus come from?Economic nexus grew from Complete Auto (1977), Quill (1992) and state cases like Geoffrey; Wayfair (2018) then overruled Quill's physical presence rule.MultistateNexus and registrationLaw as of Oct 14, 2026
- Should a company protected by P.L. 86-272 still file state returns?A Public Law 86-272 protected seller may file a no-tax return to start the limitation period, but filing can trigger minimum taxes; the choice is per state.MultistateNexus and registrationProcedureLaw as of Oct 14, 2026
- Can a receivables company have nexus where it has no office?Increasingly yes: under economic nexus, a receivables entity with no office or employees can be taxable beyond its state of formation, depending on the state.MultistateNexus and registrationLaw as of Oct 14, 2026
- What did South Dakota v. Wayfair actually decide?South Dakota v. Wayfair (2018) ended the physical presence rule for sales tax nexus but did not approve any economic nexus threshold as safe.MultistateNexus and registrationSales and use taxLaw as of Oct 14, 2026
- When Alabama recharacterizes a real estate sale as business income, what happens to nonresident composite tax?Reclassifying an Alabama real estate gain as business income under Alabama Code Section 40-27-1.1 can raise or lower composite tax on nonresident partners.AlabamaIncome and franchise taxProcedureLaw as of Oct 12, 2026
- Does a foreign corporation with no California activity owe California's minimum tax?Not automatically: a foreign corporation owes California's $800 minimum tax only if doing business or qualified there, subject to a first-year exemption.CaliforniaIncome and franchise taxNexus and registrationLaw as of Oct 12, 2026
- Is SaaS taxable in California?Software as a service becomes taxable in California on January 1, 2027, under Senate Bill 122; earlier, only prewritten software on tangible media was taxed.CaliforniaSales and use taxLaw as of Oct 14, 2026
- Does Connecticut source a production company's receipts like any other service business?Connecticut sources production company receipts by customer market unless the company is an eligible production entity affiliated with a broadcaster.ConnecticutIncome and franchise taxLaw as of Oct 13, 2026
- Which group member must file a state's combined corporate return?Connecticut and the District of Columbia have a taxable common parent file; if not, Connecticut's group chooses and the District uses its most active member.MultistateIncome and franchise taxProcedureLaw as of Oct 13, 2026
- How do states decide whether to withhold on a nonresident partner's sale gain?Each state decides whether it withholds on nonresident partners at all, which partners, below what de minimis amount, and with what exemptions.MultistateIncome and franchise taxLaw as of Sep 28, 2026
- Whose employees are they when a professional employer organization runs payroll?Whether professional employer organization workers leave the client's payroll factor is contested; the model regulation's control test points to the client.MultistateIncome and franchise taxLaw as of Oct 12, 2026
- Does Public Law 86-272 protection reach a state's minimum franchise tax?No. Public Law 86-272 limits only net income taxes, so a protected company can still owe a state's flat minimum franchise tax; California takes that position.MultistateNexus and registrationIncome and franchise taxGross receipts taxLaw as of Sep 28, 2026
- Entering voluntary disclosure? What a state-rate-only exposure estimate missesA state-rate-only sales tax exposure estimate for voluntary disclosure misses local and district taxes, understating the liability and hiding local returns.MultistateProcedureSales and use taxLaw as of Oct 13, 2026
- What happens in a CDTFA sales tax audit of an out-of-state seller?A California Department of Tax and Fee Administration audit of an out-of-state seller is often a sample projected across a period of up to eight years.CaliforniaProcedureSales and use taxLaw as of Oct 8, 2026
- When does a design studio owe California sales tax: concept or finished art?Under California Regulation 1540, concept work is generally nontaxable, and finished art is taxable in tangible form but not when sent only electronically.CaliforniaSales and use taxLaw as of Oct 9, 2026
- What happens in an EDD worker classification audit?A California Employment Development Department audit reviews everyone paid without a W-2 and may propose payroll taxes for workers reclassified as employees.CaliforniaProcedureLaw as of Oct 8, 2026
- What must a seller do with over-collected California sales tax?Under California Revenue and Taxation Code section 6901.5, a seller must refund over-collected sales tax to customers or remit it to the state, not keep it.CaliforniaSales and use taxLaw as of Oct 9, 2026
- How do California manufacturers use the partial exemption and Cal Competes?California's partial manufacturing exemption needs no approval, just a certificate to the vendor; the California Competes credit is awarded competitively.CaliforniaSales and use taxLaw as of Oct 9, 2026
- What resale documentation survives a California sales tax audit?In a California sales tax audit, a resale certificate holds up when taken timely and in good faith, complete on its face, and matchable to the customer.CaliforniaSales and use taxProcedureLaw as of Oct 8, 2026
- What happens after an S corporation files a California refund claim?A California S corporation refund claim may be examined by the Franchise Tax Board; shareholders must file their own claims, on their own deadlines.CaliforniaProcedureIncome and franchise taxLaw as of Oct 8, 2026
- Do sales reps in California create sales tax nexus below the Wayfair threshold?A seller with salespeople or contractors soliciting in California must collect sales tax from the first dollar; the economic threshold is no safe harbor.CaliforniaNexus and registrationSales and use taxLaw as of Oct 10, 2026
- Can a website defeat California throwback?When other states treat website cookies and chat as beyond Public Law 86-272, a California seller may be taxable there, so its sales escape throwback.CaliforniaIncome and franchise taxProcedureLaw as of Oct 14, 2026
- What happens in a multistate nexus study?A nexus study compares a company's activity in each state with what that state taxes, income and sales tax separately, and prices exposure and opportunity.MultistateNexus and registrationLaw as of Oct 10, 2026
- Which sales rep activities break P.L. 86-272 protection?Public Law 86-272 protection is lost when sales staff do work beyond solicitation, such as repairs, installation, collections or complaint handling (Wrigley).MultistateNexus and registrationLaw as of Oct 8, 2026
- Does New Jersey charge sales tax on a commercial real property lease?No. New Jersey sales tax does not reach a lease of real property (N.J.S.A. 54:32B-3), so a landlord should not charge it on commercial rent.New JerseySales and use taxLaw as of Oct 10, 2026
- How does New York decide someone actually left?New York applies two independent tests to a move: domicile, and statutory residency (an abode kept substantially all year plus over 183 days in the state).New YorkResidency and domicileLaw as of Oct 14, 2026
- How does New York count workdays when allocating a nonresident's wages?New York allocates a nonresident's wages by New York workdays over total workdays, excluding weekends, holidays, sick days and vacation (20 NYCRR 132.18(a)).New YorkResidency and domicileIncome and franchise taxLaw as of Oct 9, 2026
- Is SaaS taxable in New York, and where is it used?New York taxes software as a service as prewritten software (Tax Law section 1105(a)), measured by users located in New York, not the billing address.New YorkSales and use taxLaw as of Oct 10, 2026
- What happens in a New York sales tax audit of a software company?New York sales tax audits of software companies open with a records request, typically for all open quarters; customer verification letters then remove sales.New YorkProcedureSales and use taxLaw as of Oct 9, 2026
- Can California tax a nonresident spouse's out-of-state wages through community property?Yes: if a nonresident earner is domiciled in California or another community property state, half the wages are taxed to the spouse still in California.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 9, 2026
- Does a corporate limited partner in an investment fund apportion or allocate its California income?In California, a corporate fund partner ordinarily apportions its share as business income; nonbusiness interest and dividends follow its commercial domicile.CaliforniaIncome and franchise taxLaw as of Oct 10, 2026
- When do California's bright-line nexus thresholds make a passive investor a taxpayer?A passive investor is doing business in California if its sales, property or payroll, counting pass-through shares, exceed the section 23101(b) thresholds.CaliforniaNexus and registrationIncome and franchise taxLaw as of Oct 9, 2026
- Does a federal accounting method change automatically apply for California?Per Franchise Tax Board Notice 2024-01, a federal accounting method change generally applies for California only if the state conforms to the underlying law.CaliforniaIncome and franchise taxProcedureLaw as of Oct 8, 2026
- What happens in the first sixty days of an FTB business entity audit?A California Franchise Tax Board business audit opens with a contact letter, an opening conference and numbered document requests with 30-day response limits.CaliforniaProcedureLaw as of Oct 9, 2026
- How does California treat IRC 367(d) deemed royalties in worldwide and water's edge years?In California, IRC section 367(d) deemed royalties may be deferred in worldwide combined years; electing water's edge brings the deferred balance into income.CaliforniaWater's edge and internationalIncome and franchise taxLaw as of Oct 10, 2026
- How does California source receipts from services and intangibles?California sources services where the purchaser gets the benefit and intangibles where used (section 25136); amended Regulation 25136-2 applies from 2026.CaliforniaIncome and franchise taxLaw as of Oct 9, 2026
- How does a combined group with both financial and general corporations apportion its income?From 2025, California combined groups mixing financial and general members use the single sales factor unless predominantly agricultural or extractive.CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- How does California pass-through withholding work for domestic nonresident owners?California pass-through entities generally withhold 7 percent of California-source distributions to domestic nonresident owners paid over $1,500 a year.CaliforniaIncome and franchise taxLaw as of Oct 9, 2026
- Why is the county assessing property tax on leased port property?California property tax reaches a tenant's possession of exempt port land as a taxable possessory interest (Revenue and Taxation Code section 107).CaliforniaLocal and district taxesLaw as of Sep 28, 2026
- What actually happens in an FTB residency audit, from first letter to protest?California Franchise Tax Board residency audits run mostly by mail: contact letter, document requests, position letter, proposed assessment, 60-day protest.CaliforniaResidency and domicileProcedureLaw as of Oct 14, 2026
- How are days counted in a California residency audit, and what evidence wins?California's Franchise Tax Board counts residency days on a day-by-day calendar built from card, flight, cell and toll records, which stands unless rebutted.CaliforniaResidency and domicileProcedureLaw as of Oct 10, 2026
- How are receipts from services performed at sea sourced for state tax purposes?For tax years before 2026, California sources services performed at sea, outside long-term contracts, by a taxpayer-built approximation such as port days.CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- When is a vessel exempt from California property tax, and does the sales tax exemption match?California exempts vessels over 50 tons carrying freight or passengers for hire from property tax; the sales tax watercraft exemption uses a different test.CaliforniaLocal and district taxesSales and use taxLaw as of Oct 14, 2026
- What makes a water's edge election valid when the return and the election disagree?A California water's edge election needs a timely original return that computes tax on a water's edge basis; a late or amended return cannot make one.CaliforniaWater's edge and internationalProcedureLaw as of Oct 9, 2026
- Who decides a California tax appeal? The post-2017 landscapeFrom 2018, California's Office of Tax Appeals hears income and sales tax appeals; the Board of Equalization keeps insurance and alcoholic beverage appeals.CaliforniaProcedureLaw as of Oct 9, 2026
- Who is the payee for California withholding when distributions go to a disregarded entity?For California withholding, the payee behind a distribution to a disregarded entity is generally its owner, though Franchise Tax Board forms are less direct.CaliforniaIncome and franchise taxLaw as of Oct 9, 2026
- Does Hawaii's general excise tax apply to work for the federal government?Hawaii's general excise tax reaches services and contracting for the federal government, as it taxes the contractor's gross income; a few exemptions apply.HawaiiGross receipts taxSales and use taxLaw as of Oct 12, 2026
- Who withholds state income tax on a vessel crew's wages?Federal law (46 U.S.C. section 11108) bars state withholding on a qualifying seagoing crew's wages; shipyard or shoreside work can fall outside the rule.MultistateIncome and franchise taxLaw as of Oct 12, 2026
- How are a broker-dealer's receipts sourced in New York when the business is a partnership?New York sources a broker-dealer partnership's receipts by customer for corporate partners, generally by office for individuals; New York City differs.New YorkIncome and franchise taxLaw as of Oct 12, 2026
- Does claiming Utah's primary residential exemption make someone a Utah resident?Claiming Utah's primary residential exemption no longer creates a presumption of domicile, but the presumption still governs open 2012 to 2023 tax years.UtahResidency and domicileLocal and district taxesLaw as of Oct 9, 2026
- How does Washington tax commercial vessels?Washington taxes vessels under the watercraft excise tax or the commercial vessel tax, never both; vessels used only for commercial fishing owe the latter.WashingtonLocal and district taxesLaw as of Oct 12, 2026
- How does the FTB evaluate a claimed change of residency out of California?California's Franchise Tax Board tests a claimed move out of state with evidence, not declarations, using the Appeal of Bragg closest connections factors.CaliforniaResidency and domicileProcedureLaw as of Oct 10, 2026
- Does owning a disregarded LLC that operates in California give the owner nexus?Yes: a corporation that is the sole member of a disregarded LLC doing business in California is itself doing business there and owes California franchise tax.CaliforniaNexus and registrationIncome and franchise taxLaw as of Oct 12, 2026
- Is California withholding required on dividends paid to out-of-state owners?Usually not: under California Regulation 18662-4(b)(8), dividends to out-of-state owners need no withholding unless the stock has a California business situs.CaliforniaIncome and franchise taxLaw as of Oct 22, 2026
- Are sales of mortgage notes included in California's sales factor at gross proceeds or net gain?In California's sales factor, mortgage note sales count at gross proceeds for a general corporation, at net gain for a financial one (Regulation 25137-4.2).CaliforniaIncome and franchise taxLaw as of Sep 28, 2026
- When are dividends from an insurance company subsidiary deductible in California?California allows an 85 percent deduction for qualified dividends from an insurer owned at least 80 percent, under Revenue and Taxation Code Section 24410.CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- Can California's large corporate understatement penalty be waived?No: California's large corporate understatement penalty under Revenue and Taxation Code section 19138 is strict liability, with no reasonable cause exception.CaliforniaProcedureIncome and franchise taxLaw as of Oct 10, 2026
- Is a merger termination fee business income in California, and does it belong in the sales factor?In California, a merger termination fee is usually apportionable business income but is usually kept out of the sales factor.CaliforniaIncome and franchise taxLaw as of Sep 28, 2026
- A company opens its first California office: which registrations and taxes follow?A first California office brings separate Secretary of State, Franchise Tax Board and employer filings, plus a seller's permit if it sells goods.CaliforniaNexus and registrationLaw as of Oct 22, 2026
- How does California tax PFIC income when it does not conform to the federal PFIC rules?California does not conform to the federal passive foreign investment company rules; shareholders have California income only on distribution or disposition.CaliforniaWater's edge and internationalIncome and franchise taxLaw as of Sep 28, 2026
- Does filing an extension disqualify a taxpayer from California's voluntary disclosure program?An extension should not bar California's Voluntary Disclosure Program, which excludes entities that already filed a return, registered or were contacted.CaliforniaProcedureNexus and registrationLaw as of Oct 12, 2026
- Are California waiting time penalties deductible?California waiting time penalties paid to employees are generally deductible, as IRC section 162(f) reaches payments to or directed by a government.CaliforniaIncome and franchise taxLaw as of Oct 10, 2026
- What happens to a California water's edge election when the group reorganizes?A California water's edge election usually survives a reorganization; if electing and nonelecting taxpayers combine, the larger by business assets decides.CaliforniaWater's edge and internationalIncome and franchise taxLaw as of Oct 12, 2026
- How does a company with no gross receipts apportion its California income?A California company with no gross receipts may petition under Revenue and Taxation Code Section 25137 to apportion by property and payroll instead.CaliforniaIncome and franchise taxLaw as of Sep 28, 2026
- What does a second review of state tax returns look for, and when is it worth doing?A second review of filed state returns, by someone who did not prepare them, looks for refunds and understatements, most usefully before refund periods close.MultistateProcedureIncome and franchise taxLaw as of Oct 12, 2026
- When must an Ohio pass-through entity withhold for its investors, and who can be left out?An Ohio pass-through entity withholds 3 percent on Form IT 1140 only for qualifying investors, not full-year residents, C corporations or exempt investors.OhioIncome and franchise taxLaw as of Oct 12, 2026
- What happens when a partnership underpays Utah withholding because its apportionment changed?Utah pass-through withholding underpaid after an apportionment change draws interest from the original due date; penalties can be waived for reasonable cause.UtahIncome and franchise taxProcedureLaw as of Oct 12, 2026
- Is a foreign student on a company-funded scholarship taxable in California?A foreign student in California is usually a nonresident; only degree candidates exclude tuition, and living allowances are treated as California source.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 12, 2026
- Does California require withholding when a partnership distributes refinancing proceeds?Possibly: California pass-through withholding keys on California source income, not on the cash, so a refinancing distribution can still require withholding.CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- When does a disregarded LLC file a short period California Form 568?A disregarded single member LLC files a short period California Form 568 when its owner closes its books mid-year, because it has no taxable year of its own.CaliforniaIncome and franchise taxProcedureLaw as of Oct 12, 2026
- Does a change in control of an entity trigger California documentary transfer tax?Under 926 North Ardmore (2017), a change in control of an entity owning California real property often triggers documentary transfer tax, without any deed.CaliforniaLocal and district taxesLaw as of Oct 12, 2026
- What happens when California withholding credits do not match the K-1?California credits a partner with the withholding actually remitted for it, so a K-1 that understates withholding does not forfeit the difference.CaliforniaIncome and franchise taxProcedureLaw as of Oct 14, 2026
- How do states apportion REMIC excess inclusion income?Few states say how to apportion excess inclusion income of a real estate mortgage investment conduit; California Legal Ruling 2009-01 applies the percentage.MultistateIncome and franchise taxLaw as of Sep 28, 2026
- How do states treat an S corporation's 338(h)(10) election?Conforming states tax a section 338(h)(10) deemed asset sale; New York City and Pennsylvania's personal income tax do not; Tennessee taxes the S corporation.MultistateIncome and franchise taxLaw as of Oct 12, 2026
- How does California source a nonresident's compensation and fringe benefits?California sources a nonresident's pay and fringe benefits by where services were performed, generally by California working days over total working days.CaliforniaResidency and domicileIncome and franchise taxLaw as of Oct 12, 2026
- Where does the dividends paid deduction go on a California REIT return?A real estate investment trust claims the dividends paid deduction on California Form 100 as a California deduction, not within the federal starting point.CaliforniaIncome and franchise taxLaw as of Sep 28, 2026
- Is the California S corporation tax deductible on the shareholders' California returns?The 1.5 percent California S corporation tax is deductible federally but not on shareholders' California returns (Revenue and Taxation Code Section 17220).CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- What does a revenue recognition change do to state apportionment and sales tax?A revenue recognition change affects state income tax only via federal taxable income, moves the sales factor directly, and sales tax only if invoices change.MultistateIncome and franchise taxSales and use taxLaw as of Sep 28, 2026
- What taxes beyond property tax apply to a business operating in Portland?Oregon has no sales tax, but a Portland business can owe as many as six business taxes, including the Corporate Activity Tax and city, county and Metro taxes.OregonLocal and district taxesGross receipts taxLaw as of Oct 12, 2026
- Does buying Oregon real estate reset the property tax assessment?No. Oregon, unlike California, does not reassess on a sale: the maximum assessed value carries over to the buyer and grows no more than 3 percent a year.OregonLocal and district taxesLaw as of Sep 28, 2026
- How are asset management fees sourced for California apportionment?From 2026, California sources asset management fees not covered by Regulation 25137-14 to investors' domicile under amended Regulation 25136-2.CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- Are sales picked up at a California warehouse California sales for apportionment?Not automatically: California uses the ultimate destination, so goods picked up in California solely to transport out of state can be out-of-state sales.CaliforniaIncome and franchise taxLaw as of Sep 28, 2026
- Does California follow a federal check-the-box entity classification election?Yes: California follows an eligible entity's federal classification under Revenue and Taxation Code Section 23038, and allows only a narrow separate election.CaliforniaIncome and franchise taxLaw as of Oct 12, 2026
- When does California throwback apply, and what makes a taxpayer taxable in another state?California throws back goods shipped from the state unless the seller is subject to income or franchise tax in the buyer's state, or could be.CaliforniaIncome and franchise taxLaw as of Sep 28, 2026
- When is a foreign corporation excluded from a California water's edge combined report?A foreign corporation is generally left out of a California water's edge combined report unless its United States factors average 20 percent or more.CaliforniaWater's edge and internationalLaw as of Oct 12, 2026
- Does it matter for Connecticut taxes whether real estate is held in an LP or an LLC?For Connecticut taxes, real estate held in an LP or an LLC is treated the same when the entity is a partnership for federal purposes.ConnecticutIncome and franchise taxLaw as of Oct 12, 2026
- Does a partnership that owns a single-member LLC doing business in Oregon have filing obligations there?In Oregon, a partnership reports its disregarded LLC's activity, the Corporate Activity Tax ignores disregarded status, and the LLC needs state authority.OregonNexus and registrationIncome and franchise taxGross receipts taxLaw as of Sep 28, 2026
- Does California tax income a foreign corporation excludes under IRC Section 883?Generally no: California excludes IRC Section 883 income in a water's-edge report by following federal law, and for worldwide filers under section 24320.CaliforniaWater's edge and internationalIncome and franchise taxLaw as of Oct 12, 2026
- Does the Nevada real property transfer tax apply to a transfer between affiliated entities?No Nevada transfer tax is due on an affiliate deed that fits the mere change exemption (NRS 375.090(1)) or the wholly owned entity exemption (375.090(9)).NevadaLocal and district taxesLaw as of Oct 12, 2026
- When can a taxpayer use alternative apportionment in New York?New York allows alternative apportionment if the statutory fraction misreflects New York business income or capital, shown by clear and convincing evidence.New YorkIncome and franchise taxProcedureLaw as of Sep 28, 2026
- How is the Tennessee franchise tax computed for an entity holding real estate in the state?For tax years ending on or after January 1, 2024, Tennessee franchise tax is 0.25 percent of apportioned net worth (minimum $100), with no property measure.TennesseeIncome and franchise taxLaw as of Sep 28, 2026
- How does a taxpayer protest a Notice of Proposed Assessment in California?A California Franchise Tax Board Notice of Proposed Assessment is protested within 60 days of its mailing date (Revenue and Taxation Code section 19041).CaliforniaProcedureLaw as of Oct 12, 2026
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