Corporation tax law changes

Sometimes the law changes regarding how a trade or business is taxed in California. The changes apply to all trades or business including corporations, S Corporations, LLCs, partnerships, and sole proprietorships. To determine if you're considered doing business in California and how you're taxed, review Doing Business in California and Apportionment and allocation.

Here are recent updates to the California Revenue and Taxation Code (RTC).

Start date	RTC Section	Summary of new law
1/1/2013	25128.7	All business income from an apportioning trade or business must be apportioned to California based on sales, unless the apportioning trade or business is predominantly engaged in qualified business activities described in RTC 25128(b). California business income is determined by multiplying the total business income by their sales factor (single sales factor). Taxpayers required to follow special industry apportionment and allocation regulations under RTC 25137 must follow the sales factor provisions under special industry regulations, with the exception of any rule excluded by the provisions of RTC 25136(g)(3). The property and payroll factors would not be used. Visit Apportionment and allocation for more information.
1/1/2013	25136	Requires market assignment of sales from other than tangible personal property for all apportioning trades or businesses (refer to RTC 25136 and California Code of Regulation (CCR) 25136-2).
1/1/2013	25136.1	Provides special sales factor rules for certain cable system operators.