Posted

California Revenue & Taxation Code Section 17951: California Source Income and Its Many Quandaries

Pursuant to Cal. Rev. & Tax. Code Section 17041, a California resident is taxed on all income, from whatever sources derived. In contrast, Cal. Rev. & Tax. Code Sections 17041(b) and 17951 state that nonresidents and part-year residents of California are only taxable on income from sources within California. Exactly what income has a California “source” is the subject of much debate and legislative action.

(The remainder of this article can be accessed in the June 2006 edition of Lexis California Tax Practice Insights.)