What happens when an out-of-state business suddenly has an employee working from home in California due to COVID-19, and in accordance with Governor Newson’s Executive Order N-33-20, the “Stay at Home” Order? A corporation may be concerned that while it had no physical connections with California prior to COVID-19, that status may now have changed resulting in a loss of the protections under Public Law 86-272. Fortunately for those businesses, the FTB has provided assurance indicating if the company’s only presence in California relates to teleworking employees as defined, the company’s status will not change for nexus purposes. Furthermore, the FTB said it will not include the telecommuting employees’ wages in the minimum payroll threshold set under the law. For now, the activities in California under Executive Order N-33-20 will be treated as “de minimis activities”.
To read the FTB’s FAQ, including those related to Teleworking and the “Stay at Home” order, click here.
If you have questions about how this may affect your business, please contact one of our attorneys.