A California nonresident is taxable by California on income earned from sources in California. Where two or more commonly owned companies carry on a trade or business within and outside of California, the net income is allocated and apportioned between California and other states under the Uniform Division of Income for Tax Purposes Act (“UDITPA”). In Appeal of Bindley, 2022-OTA-179P, the California Office of Tax Appeals (“OTA”) held that an Arizona screenwriter who wrote screenplays for two California LLCs operated a unitary business and thus could be taxed under the unitary business regulations. The OTA has applied Bindley to other cases to hold nonresidents taxable in California. See, Appeal of Bass, 2022-OTA-145; Appeal of Daker, 2020-OTA-096. On May 1, 2026, the California Court of Appeal in Garcia-Rojas v. Franchise Tax Board, __ Cal.App.5th ___ (Case No. A172054) smacked down the holding of Bindley.
Robert S. Horwitz is a Principal at Hochman Salkin Toscher Perez P.C., former Chair of the Taxation Section, California Lawyers’ Association, a Fellow of the American College of Tax Counsel, a former Assistant United States Attorney and a former Trial Attorney, United States Department of Justice Tax Division. He represents clients throughout the United States and elsewhere involving federal and state administrative civil tax disputes and tax litigation as well as defending clients in criminal tax investigations and prosecutions. In 2022 the Tax Section of the California Lawyers Association awarded him the Joanne M. Garvey Award for lifetime achievement in and contributions to the field of tax law. Additional information is available at http://www.taxlitigator.com
For more information, please contact Robert S. Horwitz at horwitz@taxlitigator.com
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