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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12197
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
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I reside in California. My company operates and is based in

Resolved Question:

I reside in California. My company operates and is based in the Midwest.
Since locating here I have had the required CA state tax withheld, thus paying personal taxes.
Recently, the State asked about possibly filing a corp tax return in California.
Taxes are already filed with the head quarter state in the Midwest.

Can a specialist with real know-how on this subject provide me with some direction on this?

Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

What type of business do you have? Is it a corporation?

MyVirtualCPA :

Is there any business performed in the state of California/

Customer:

Thank you.

Customer:

Yes it is a corporation

Customer:

no there is not, as I am a commodities broker, my only business I am conducting is phonework with clientele, all of which are outside of CA and the USA....

MyVirtualCPA :

Then you do have an office in California and you would owe tax on any profit that is california sourced

Customer:

I do not have an official office per se, but work from my home.

Customer:

If the corporation pays taxes on a corporate level in the Midwest, and it has always been that way, wouldnt that be the continued route to go?

MyVirtualCPA :

Yes, that is an office. You are conducting business in California

MyVirtualCPA :

You will owe tax to multiple states

Customer:

OK. Understood. How does that work then though?

MyVirtualCPA :

But in California you are not taxed on everything. Just California sourced income

Customer:

Would I owe tax then not in the Midwest at all, if my residence is California?

Customer:

I am wondering if this is part of the (let me be blunt please) $900 per annum for "doing business in California" portion of the California Franchise Board?

MyVirtualCPA :

You would need a highly skilled tax accountant to process your returns as interstate commerce can be very tricky

Customer:

Thats what I was afraid of, lots of "gray area"....

MyVirtualCPA :

Yes, I would have to have all of your information in front of me, in order to truly determine what your liability would be and to whom, and that's beyond the scope of our services.

Customer:

Do you have any suggestions for where I can go and see where this is all laid out tax wise in California?

Customer:

Understood.

MyVirtualCPA :

You can contact your California State Board of Accountancy for a list of names of accountants in your area.

MyVirtualCPA :

I would find one that specializes in multistate commerce

Customer:

OK no problem. Does this mean our session is completed?

MyVirtualCPA :

That depends on if you are satisfied or not

MyVirtualCPA :

Do you have further questions?

Customer:

I actually do have questions that pertain to the notice I rcvd from the CA Franchise Board. If I have been here since 2010, and done my taxes the way I was advised, why would they be coming to me now asking such questions about corporations and corp tax returns and the like? I am confused.

MyVirtualCPA :

It takes them sometimes a couple of years to get around to you.

MyVirtualCPA :

They run behind

MyVirtualCPA :

So, they are likely making the inquiry starting with the year 2010.

Customer:

If the other part of my business is 77 years of age, and has no intention of running corp tax returns any differently than the last 37 years, I wonder what then happens? What is your CA corp tax experience with something like this? Have you heard of it before?

MyVirtualCPA :

In my experience, it just takes a professional to contact the FTB to determine if any tax is even due at all.

MyVirtualCPA :

IT could be that you are not truly performing services in California and have no tax nexus here. It all depends. It's a very grey area.

Customer:

Thank you. I am satisfied with that, and I thank you much for your time. My name is XXXXX XXXXX it was nice to online chat with you in regards XXXXX XXXXX topipc. It is a gray area and I am like most irritated by more meddling then letting me go about doing what I do, pay my taxes and go on....

Customer:

Thank you.

Customer:

Daniel

MyVirtualCPA :

Thanks, Daniel. Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today

Customer:

Sure I would be happy to do so.

MyVirtualCPA :

Thanks so much

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12197
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Megan C and 7 other Tax Specialists are ready to help you

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