CA charging contractor taxes on Affiliates from out of State
JS_Harris
10:56 pm on Mar 17, 2010 (gmt 0)
There is a discussion going on in the eBay forum titled "CA Wants you to Pay Income Tax if You don't Live There" that says notices were sent to some affiliates by the local tax board demanding tax revenue because the affiliate company is based in CA and filed a 1099 on them.
Is this an end around play of the constantly proposed and often refused new affiliate nexus tax?
LifeinAsia
4:00 pm on Mar 18, 2010 (gmt 0)
It's apparently another attempt to enforce existing tax code. According to the CA Franchise Tax Board web site-
Nonresidents must file a return if they have any California source income and their income from all sources is more than the filing requirement amounts for residents.
Since California has so many companies with out-of-state contractors/affiliates (Google, eBay, Commission Junction, etc.), and it's unlikely that CA is going to change the current tax code, they (the companies) should seriously consider moving out of state (or at least open another company out of state from which payments are made).
