"Doing Business" Thresholds in California

The California Franchise Tax Board (FTB) recently announced the 2018 indexed threshold values for determining whether an entity is doing business in the state. If any of the following conditions are met, the taxpayer is considered to be doing business in California:

  • Taxpayer is organized or commercially domiciled in the state;
  • Sales in California exceed the lesser of $583,867 or 25 percent of the taxpayer's total sales;
  • The taxpayer's real and tangible personal property in the state exceeds the lesser of $58,387 or 25 percent of the taxpayer's total real and tangible personal property; or
  • Compensation paid by the taxpayer in the state exceeds the lesser of $58,387 or 25 percent of the taxpayer's total compensation payments.

For more information, you can read the FTB's October newsletter here.

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