All About Business October 2018 Tax News
The adjusted interest rate for the period January 1, 2019, through June 30, 2019, will be 5 percent January 1, 2019. This rate is compounded daily and accrues with respect to various state taxes including: personal income, corporate income, and franchise. The rate for corporation tax overpayments for the period will be two percent.
Taxpayers’ sales, property, and payroll for doing business purposes
"Doing business" means actively engaging in any transaction for the purpose of financial or pecuniary gain or profit. For taxable years beginning on or after January 1, 2011, a taxpayer is doing business in this state for a taxable year if any of the following conditions have been satisfied:
- The taxpayer is organized or commercially domiciled in this state.
- Sales by the taxpayer in California exceed the lesser of $500,000) or 25 percent of the taxpayer's total sales.
- The real property and tangible personal property of the taxpayer in this state exceed the lesser of $50,000 or 25 percent of the taxpayer's total real property and tangible personal property.
- The amount paid in this state by the taxpayer for compensation exceeds the lesser of $50,000 or 25 percent of the total compensation paid by the taxpayer.
Furthermore, when we determine the amount of the taxpayer’s sales, property, and payroll for doing business purposes, we include the taxpayer’s pro rata share of sales, property, and payroll from partnerships, LLCs treated as partnerships, and S corporations.
For taxable years beginning on or after January 1, 2012, the conditions for determining “doing business” also have been “indexed” by California’s Consumer’s Price Index.