California: The Golden State

California is located in the western United States on the Pacific Ocean coast. The state borders Mexico to the south. The states of Oregon, Nevada and Arizona are the American neighboring states. The third largest federal state in terms of area (420,000 km²) is larger than Germany. According to ehuacom, “The Golden State” is populated by over 40 million people. This makes it by far the most populous in the United States. At 4,418 meters, Mount Whitney is the highest mountain in the United States, excluding Alaska. California’s landscape is mainly characterized by numerous beaches and nature parks.

California’s economy is booming. It would currently be the fifth strongest in the world. It thrives on industrial growth, access to a highly educated workforce, good infrastructure and a consumer market of 39 million people.

California Location Map

OPTIMAL BUSINESS LOCATION

In recent years, the “Golden State” has developed into the most efficient and most profitable business location in the world. California offers a combination of intellectual capital, business services and financial acumen, among others, that help companies thrive. The “Golden State” has 51 Fortune 500 headquarters. California companies are 2,156% more profitable than Texas companies and 38% more profitable than New York companies.

INNOVATION CAPITAL CALIFORNIA

Of course, Silicon Valley is known around the world. Tech industry giants like Apple and Uber are leading the way, but it would be wrong to reduce California to that, since the state is a leader in scientific and medical advances, for example.

But companies from other sectors such as aerospace, renewable energy and agriculture are also benefiting from California’s technological progress. They are able to change and optimize processes and become the best in their field.

The strong prevailing entrepreneurial spirit is reflected in the statistics. 141 companies are founded for every 100,000 inhabitants. The state supports its residents with venture capital in the billions. This is intended to continue the tradition of presenting a large number of new discoveries.

IMPRESSIVE COLLEGE EDUCATION

The network of the University of California alone has already produced 62 Nobel Prize winners in its research institutions. In addition to the very good public university system, the “Golden State” also has some of the most renowned private universities in the world, including Stanford University and the California Institute of Technology.

The excellent promotion of talent ensures that the local universities produce graduates who make it to the top in their fields of activity. In addition to the Nobel Prize winners mentioned, this also applies to politicians, astronauts or entrepreneurs who have become billionaires in the private sector.

The varied offer at the universities is ideally supplemented by a far-reaching program of training and further education measures for employees. For example, Career Technical Education (CTE) offers training in 15 key industries. The Employment Training Panel (ETP) provides financial support to employers for the further training of their employees.

IMMIGRATION OF INTELLECTUAL CAPITAL

California is home to one of the most diverse and integrated populations in the world. The impact of diverse demographics and different cultural perspectives has a very positive impact on the business environment.

The well-known universities ensure an influx of local, national and international talent. Many of the students stay in California after their studies, enrich the business world with their bright minds and ideas and pursue careers. The “Golden State” also acts like a magnet on experienced specialists. In most cases, the main reason lies in the numerous options on the labor market.

The very high quality combined with its diversity means that the California workforce provides a great competitive advantage for companies locating in the “Golden State” and striving for success.

CALIFORNIA INCOME TAX

California imposes an income tax of 1-13.3% depending on income. In addition, federal income taxes are payable.

CORPORATE INCOME TAX IN CALIFORNIA

California has a corporate income tax rate of 8.84%. In addition, federal corporation tax is payable.

SALES TAX IN CALIFORNIA

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales Tax Rate in California

The sales tax in California is 7.25% at the state level. Municipalities or districts charge an average of 1.43% sales tax. Combined, an average of 8.68% is due.

California Nexus Laws & Sales Tax

Effective Date :

April 1, 2019

Transactions included:

Entire combined sales of tangible personal effects shipped into the US state by the retailer and anyone associated with the retailer. Services are not included in the threshold.

Treatment of tax-exempt transactions:

Exempt sales (ie non-taxable sales, such as sales for resale) are included; exempt services, on the other hand, are not included in the threshold value

Reason:

Sale only

Sales/Transactions Threshold:

$500,000

Evaluation period:

Threshold applies to sales in the previous or current calendar year

Extra information:

  • California corporations that reach the economic nexus threshold in the US state must collect all (local) county taxes effective April 25, 2019.
  • Registration Requirements : California requires remote businesses to register and begin collecting sales tax on the date they cross the Economic Nexus Threshold. For more information, see the CDTFA FAQ.
  • Use tax collection requirements
  • CDTFA Wayfair Frequently Asked Questions
  • AB147

California Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

October 1, 2019

Economic Nexus Threshold:

More than $500,000 in sales in California in the current or previous calendar year. When calculating the threshold:

  • Remote sellers should include sales made through a marketplace intermediary
  • Marketplace intermediaries should include all sales through the marketplace

Registration requirements:

  • Remote Multichannel Sellers: You must register and collect California Use Tax on sales that are not taxed by a Marketplace Agent once you cross the Economic Nexus Threshold.
  • Remote Marketplace Vendors: You do not need to register with the state if you cross the Economic Nexus Threshold if; Contact the California Department of Tax and Fee Administration (CDTFA) for more information.
  • In-State Multichannel Sellers: You must register with the CDTFA and collect tax on sales that are not taxed by a marketplace intermediary.
  • State Marketplace Sellers: You must register. Contact the CDTFA for more information.