[taxaskmepe]

Hello,

I am the sole member of a Single member LLC, which is incorporated in California.
I, myself am a nonresident alien (I do not live in the US).
In the past year, the LLC had some sales of less than $2000, to customers in the state of California. All the other remaining sales were to Out of state customers across the US.Total sales less than $30000.

As a single member LLC, all the income must flow to me, and I will pay income tax on this income, by filing an IRS Form 1040 NR.
However, do I also need to file a California Sales tax return (540-NR), which is a personal income tax return in the state of California?
Plus, do I need to pay any personal income tax to the state of California, given the fact that the California sales are less then $2000-$3000?
If so, at what rate, is that tax?

Any help would be appreciated.

Regards
BUD

[AtlantaTaxExpert]

BUD:

If you have established a place of business in California, then a California state tax return is required, even though you are NOT a California resident. Otherwise, no.

You need to contact the California Franchise Tax Board to determine if you need to pay sales tax on the $2,000 in sales to California residents. I suspect you DO have to pay that tax, but each state has different thresholds as to when the tax is required.

[taxaskmepe]

Hi,

I do not have an office location in California. It is an LLC incorporated in California, at a California address of an associate.
I am aware that CA sales tax would need to be paid.
I am referring to whether I would need to pay separate California INCOME tax on this income, since only about $2000 is attributable to California customers. The rest of the entire sales income is from customers across the US, not in California.

BUD

[AtlantaTaxExpert]

BUD:

It does not MATTER from where the income comes; it is flowing THROUGH your California location, so in the eyes of the California Franchise Tax Board, it is income EARNED within the borders of California and thus subject to California income taxes.

[taxaskmepe]

SO I would need to file the Form 540NR as well, and do I pay tax twice: Once to the IRS, and again to the FTB, as per California rates?

Thanks

[AtlantaTaxExpert]

Yes, that IS correct.

Note that you CAN deduct the California taxes paid as an itemized deduction on your federal income tax return.

[taxaskmepe]

Thank you.
And, would that tax need to be paid on only the California portion of the entire sales ($2000), or on the complete US sales of $30000?
Also, any California sales tax paid out of our own pocket (uncollected from customers), would also be allowed as an itemised deduction right?

[taxaskmepe]

I read on the FTB site, that if the California source income is less than $15152, and if you're single and under 65, then one does not need to file a California personal income tax return.
Is that true, and in this case does the amount of $15152 income refer to the income from any California sales only, or also the worldwide income of the California LLC that I might own?

If there is a need to pay income tax on the California income amount of $2000, at what rate is this to be paid?

At what rate would the California income tax be paid? IS there a California tax rate table available on ftb.gov or elsewhere?

Thanks

[AtlantaTaxExpert]

Again, you are NOT paying California income tax on the $2,000.

You are paying on the net profits of your business that is showing griss receipts in excess of $30,000.

Look at the instruction manual for the Form 540. The tax tables will be in there.