California ~ Corporate Income Tax: Regulation on Sourcing of Sales of Other Than Tangible Property Adopted

A California corporation franchise and income tax regulation has been adopted that addresses the market-based sourcing rules for sales of other than tangible personal property when taxpayers elect for taxable years beginning after 2010 to use the single sales factor formula to apportion their business income. These sales are considered to be in the state if the taxpayer’s market for the sales is in the state. Sales from services are assigned to California to the extent the purchaser of the service receives the benefit of the service in California. Sales from intangible property are assigned to California to the extent the property is used in California. Sales from the sale, lease, rental, or licensing of real property are in California to the extent the real property is located in California. Sales from the rental, lease, or licensing of tangible personal property are in California to the extent the property is located in California. Special rules allow for the reasonable approximation of information under certain circumstances, such as when the necessary data of a smaller business cannot be developed from financial records maintained in the regular course of business. Numerous definitions and examples are provided, and the sales factor provisions set forth in other apportionment regulations are incorporated by reference, with appropriate modifications.

Reg. 25136-2, California Franchise Tax Board, effective March 27, 2012

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Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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