"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

True, but I didn't think I suggested anything like that ...
I thought I just suggested filing a California form 568 and
apportioning the income in and out of CA ...

Katie

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Katie Jaques <katiej_1958[at]yahoo.com> wrote:

- quote -

Wouldn't it be more technically correct to say that you
simply compute the California apportionment under the rules
that California prescribes. There is no calculation of the
"Washington apportionment" because there isn't one. IOW,
it's not like you compute the WA apportionment and then
subtract it from something to get the CA amount.

MTW

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onealdavid[at]yahoo.com (David O'Neal) wrote:
- quote -

Well, I'm not sure how the "series" thing works in DE, but
if you have a tiered structure where by LLC-1 is a member of
LLC-2 which in turn is a member of LLC-3, the "total income"
does not flow up through the tiers and get counted over and
over. (Originally it did, but there was a law change on
that.) So breaking the business into two or more LLCs,
whether bro-sis or tiered, might get the base down below the
minimum where there would be no fee.

Note also that the base for this fee is "total income"
(defined as gross receipts with some specified adjustments)
from ALL sources, BEFORE any apportionment. I think it's
totally unconstitutional, just like the per-axle truck fee
in Pennsylvania (ATA v. Scheiner). But somebody has to
challenge it.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

You get to apportion part of it out of California <G> . Not
all of the members of this LLC are CA residents.

Katie

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katiej_1958[at]yahoo.com (Katie Jaques) wrote:

- quote -

Hmmm, California really makes out with that gross receipts
tax on LLCs. I just got to thinking what if he broke up the
LLC into series as allowed in the Delaware LLC statutes.
Couldn't this help reduce the amount of gross receipts
subject to the LLC tax?

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Katie Jaques <katiej_1958[at]yahoo.com> wrote:

- quote -

What is the significance of an apportionment to Washington
where there is no income tax?

MTW

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"Paul" <taxman[at]negia.net> wrote:
- quote -

Per your question, my tax advisor says I do not have Nexus.
But I fear she does not understand the complexities (as your
first two very helpful posts suggest), thus my posting for a
second opinion! =)

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polaris[at]onebox.com (cchabot) wrote:

- quote -

Since one of the members of the LLC is performing services
on its behalf in California, the LLC is doing business in
California and must file Form 568 and apportion its income
between California, Washington, and any other state where it
performs services. The LLC is subject to the $800 annual
minimum tax, plus the LLC fee based on its total income.

Each of the owners who is not a California resident owes tax
to California on his/her distributive share of the LLC's
income that is apportioned to California. (Of course the
California resident member is taxable on all of his
flowthrough income, regardless of source.)

I haven't looked lately, but I believe that software that is
delivered electronically is still exempt from California
sales and use tax. Any tangible personal property that is
delivered as part of the sale, such as manuals, etc., may be
taxable.

There is no question that your LLC has nexus with California
and must have a California seller's permit if it is selling
taxable property. Check with the SBE to determine exactly
which of your sales are subject to California sales/use tax.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"cchabot" <polaris[at]onebox.com> wrote

- quote -

If you GO to California, then sales tax is most likely due.

- quote -

That is most likely frequent enough to establish nexus.

- quote -

You stated earlier that you didn't have any California
offices, yet clearly you do.

- quote -

What does your tax advisor have to say?

--
Paul A. Thomas, CPA
taxman at negia.net

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"cchabot" <polaris[at]onebox.com> wrote

- quote -

The general rule is that if you can spell California, the
tax people in California believe you owe them taxes on every
penny you ever made. That may be a modest exaggeration, but
it is not hyperbole.

One member of an LLC lives in California and does some work
from there? That is nexus. How much nexus I don't know?

You need a very savvy State tax professional on this one.
If Katie Jaques responds to your question, heed her advice!

Dick

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Help! Opinions greatly needed.

I have a Delaware LLC that has one physical office, which is
located in the state of Washington (WA). We do not have an
office in CA. Do any of the following additional facts,
however, trigger "nexus" for me in the state of CA? I am
trying to figure out whether I need to charge sales tax in
CA:

-- We sell downloadable software and consulting services to
companies in CA. I need to know whether to charge sales tax
on both, one, or none of these revenue streams.

-- We periodically (once every 1-2 months) make sales trips
to CA to solicit business. We do not have a full time sales
rep stationed there however.

-- One of the LLC owners (there are 3 of us) lives in CA and
performs his consulting work (less than 15 hours/week) from
his home in CA. The other two LLC owners live and work in
WA.

-- We are registered as a foreign LLC in the state of CA
because we used to be based there.

Any opinions welcome. Thank you!

CC

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