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The Long Arm of California’s Market Sourcing and ‘Economic Nexus’ Standards–Reaching Nonresident Business Owners Everywhere

By Dakessian Law | September 8, 2022

Forbes (September 8, 2022):  The exodus of business owners leaving California raises an issue that may be counterintuitive for some—that California can and will tax the income of nonresidents who never set foot in the state.

Unlike wages or compensation, which are typically taxed where services are performed, it is the footprint of the business that typically determines the California tax treatment for business owners conducting operations as sole proprietors or as owners of flow through entities (e.g., LLCs, partnerships and S corporations).


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