S-corp question

[AccTaxMan]

A S-corp was incorporated in Nevada. But all the shareholders are California residents and the address of the S-corp is also in California. Should the S-corp file a California state tax return?

[Matt Sova]

Business

Where does the S-Corp conduct it's business in California? The state of incorporation does not matter for state tax purposes. If someone here in MI decides to incorporate as a NV or DE corporation, they still have to follow MI law because that is where the business is being conducted.

[S T]

Calif looks to where the Corp is conducting it's business and the income - Disregard that they formed in Nevada - it will not escape California Taxes

Yes on Filing the Calif S Corp Return -You will also have to pay the S Corp $800 fee to FTB

If shareholders are Ca Residents - the K-1 information will also be reported on the Calif Shareholder personal form 1040.

Sandy

[Roland Slugg]

Calif looks to where the Corp is conducting it's (sic) business and the income - Disregard that they formed in Nevada - it will not escape California Taxes

Yes on Filing the Calif S Corp Return -You will also have to pay the S Corp $800 fee to FTB

Perhaps not. The OP didn't say where the business is actually located, only that it has a California address, which may just be a mailing address. If all its business is conducted in Nevada, or some other state, it does not have to file a California tax return.

The shareholders, however, sill have to report the income, reported on the K-1s, on their personal returns, since they are California residents.