Posted on 01/05/2023 9:32:15 AM PST by grundle
In the Matter of Blair S. Bindley, OTA Case No. 18032402 (May 30, 2019), a sole proprietor performed all of his services outside of California, but some of his customers were in California. Is that enough for the poor guy to attract California tax liability? The California taxing authorities said he was operating a "unitary" business. Therefore, his tiny business was subject to California's apportionment rules. The FTB would not budge, so Mr. Bindley went over their head to the state’s Office of Tax Appeals (OTA), but it agreed with the FTB. This case has precedential effect, so it is clear that the Golden State can go after other non-Californians too, and it’s happening. Exactly what was poor Mr. Bindley’s tax offense in California? He is a self-employed screenplay writer living in Arizona. He performed services for a few companies headquartered and registered in California. The California Franchise Tax Board matched income records showing that he collected $40,000 of income from California companies. Not surprisingly, Bindley did not file a California tax return.
(Excerpt) Read more at forbes.com ...
Supreme Court here we come.....................
A new level of evil emerges.
California will lose this case in court.
When I was considering a job in California, I discovered that California taxed the retirement income of persons who had prviously lived in the state. IOW, if you ever filed a tax return in CA, then CA believed they could tax your retirement income year after you left the state and were no longer resident in the state. They lost that case in federal court. They will lose this one.
Then watch California government howl when state residents complain no one wants to deal with them any more, and emmigration surges even higher.
Welcome to the Hotel California...................
California is an enemy country.
Not a first for CA, they got away with taxing ex-residents retirement income for a LONG time.
It took an act of congress to put an end to the “Source Tax”.
This would seem to me (Not a lawyer) to fall under the same prohibition.
If you do not live there and cannot (Legally) vote there you do not have even the pretense of representation and should not have to pay them a cent in tax.
I get that ruling for private pensions. But what about state-funded public pensions that the state has knowledge of? I guess backlash from the unions is the only thing that had prevented them from going after the public pensions.
” I discovered that California taxed the retirement income of persons who had prviously lived in the state.”
My wife retired from Sacramento County. We are now in Florida.
No taxes are withhheld from her retirement and we file no state tax returns.
When I worked as a computer consultant for a large consulting company years ago, I ended up working onsite in a number of different states, and having to do state tax returns in some of them. But that was because the work I was carrying out actually took place in those states.
With remote access/work from home, onsite work in the IT world is much reduced.
I am currently logged in to a server that is somewhere in Asia.
Not sure that state tax laws have caught up with these situations.
My current employer is based in one state, I live in another, our US based facilities are in multiple states and our IT infrastructure is in multiple countries.
touché
Sales/use tax may be at play here, but not income tax.
Ok, what if the non-resident does not pay? How does California enforce it?
This is like my friend who visited South Africa and drove around the country for 3 weeks. When he came back to New York, a week later, he received an official letter from the South African transportation department informing him that a speed camera near Capetown caught him speeding and he had to pay about $100 via credit card on their government website.
He refused to pay and tells me he’s never going back to South Africa. That was 2018. How’s the South African government going to come after him.?
Never do biz in California or Illinois.
This happens all the time in California.
TexasGator wrote: “No taxes are withhheld from her retirement and we file no state tax returns.”
I intended to mention that it was in the 1990s when CA was forced by the courts to stop this practice.
Yes and it is quite common if one does business across state lines.
I grew up when California truly was the Golden State. There was so much opportunity getting jobs and going to college.
To paraphrase Andrew Jackson’s “John Marshall has made his decision, now let him enforce it.”
California has sent out their tax bill, now let them collect it.
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