The following revisions clarify apportionment of income for purposes of determining annual limited liability (LLC) fees due to the Franchise Tax Board (FTB) from multi-state LLCs.
Revenue and Taxation Code §25136
Amended by S.B. 858
Effective: For taxable years beginning January 1, 2011
For purposes of calculating the annual limited liability company (LLC) fee due to the Franchise Tax Board (FTB) from a multi-state LLC doing business in California, the calculation of gross income can be made:
- by electing to be taxed under a single sales factor; or
- by making no election, resulting in the LLC being taxed under property, payroll and double sales factors.
If a multistate LLC elects to be taxed under a single sales factor, the gross income upon which the annual fee is based is apportioned to California for:
- services received in California;
- the sale of intangible property used in California;
- the sale of marketable securities if the buyer is in California;
- the sale, lease, rental or licensing of real property located in California; and
- the rental, lease or licensing of tangible personal property located in California.
If a multistate LLC does not make an election to be taxed under a single sales factor, the gross income upon which the annual fee is based is apportioned to California for:
- income-producing activity performed in California; or
- the greater proportion of income-producing activity is performed in California, based on performance costs.