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FTB Announces 2016 Inflation Adjustments to “Bright-Line Nexus” Thresholds

| Dec 12, 2016 | FTB |

California Rev. and Tax Code section 23101 defines what it means to do business in California, including a sales threshold for taxpayers not physically located in the state. A taxpayer is considered to be doing business in California “if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit” where any one of a number of conditions are satisfied, including having $54,771 in real and tangible personal property (originally $50,000), $54,771 in payroll (originally $50,000), and $547,711 in sales (originally $500,000) in the state for taxable year 2016.

The original bright-line nexus threshold amounts have been adjusted for inflation every year since the code was first implemented, in 2011.

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