CARB proposes defining "
doing business in California" using
California Revenue and Tax Code § 23101, but with critical modifications to avoid capturing companies with minimal contact.
Inclusion Criteria:
A company is considered to be doing business in California if it meets any of the following:
•
Sales Threshold: It has sales in California exceeding the inflation-adjusted threshold (approximately $735,019 for 2024).
•
Transactional Nexus: It actively engages in any transaction for the purpose of financial or pecuniary gain or profit.
•
Domicile: It is organized or commercially domiciled in California.
Exclusions:
•
No Property or Payroll Thresholds: CARB proposes omitting the sections of the Tax Code related to property and payroll (Section 23101(b)(3-4)). This means a company will not be considered "doing business" solely based on having property or payroll in the state; there must be a sales or transactional nexus.
•
Telework Exemption: Entities whose only connection to California is the presence of teleworking employees are proposed to be exempt.
.svg)
