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April 9, 2024
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CA form 568 schedule IW - Need clarity on "Income from sources derived from or attributable to California"?

  • April 9, 2024
  • 1 reply
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I am looking for a clear definition of "income from sources derived from or attributable to California" in CA form 568.  I have a SMLLC in CA and it sells/ships tangible personal properties to customers in CA and other states. 

 

Since my SMLLC exists only in CA and all my products ship out from CA, does it mean that all my SMLLC income is income derived from or attributable to CA...regardless of where I ship my products to?  

 

    Best answer by PatriciaV

    Yes, if your business is based in California and you ship your products from California, all your sales income is sourced in California. It doesn't matter where you shipped your products for state income tax purposes.

     

    Per the California Franchise Tax Board, sourced income includes, but is not limited to:

    • Services performed in California
    • Rent from real property located in California
    • The sale or transfer of real California property
    • Income from a California business, trade or profession

    1 reply

    PatriciaV
    PatriciaVAnswer
    Employee
    April 15, 2024

    Yes, if your business is based in California and you ship your products from California, all your sales income is sourced in California. It doesn't matter where you shipped your products for state income tax purposes.

     

    Per the California Franchise Tax Board, sourced income includes, but is not limited to:

    • Services performed in California
    • Rent from real property located in California
    • The sale or transfer of real California property
    • Income from a California business, trade or profession
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