3 ms·
I think one of us is misunderstanding something. If CA and CO both claim you owe them money, you pay the value to CO, and then you only owe the difference to CA
by joshuamorton 6y ago
I think one of us is misunderstanding something. If CA and CO both claim you owe them money, you pay the value to CO, and then you only owe the difference to CA, so the most state tax you pay is 13%. CO gets 4% and CA gets 13-4%=9%. I've filed my taxes split between CA and another state before and that's what you do.
If CA comes after you for not filing taxes, you may owe fines, but you can still deduct other state tax when filing CA state taxes. SALT isn't relevant.
Like to give an example, if I found a startup in SV, and run it their for 5 years, move to Denver and go public and cash in my options as a CO resident, I'd argue that most of that money was earned while in CA. California enforcing that doesn't seem unfair as long as they treat it the same as any other income (allow you to deduct other state tax)
- gnicholas 6y agoIt sounds like you are taking the position of the CA taxing authorities, who have lost in court on this point. You're welcome to do so (with your own money!), but other CA taxpayers would be wise to embrace the courts' position.
- joshuamorton 6y agoI asked why it would be unfair, not what the legality was.
- gnicholas 6y agoAh, I thought fairness meant in the current legal system. If there were different laws it would be different. But even with your example, imagine starting a company in CA, having remote engineers around the world building your company, and then having all of your gains taxed in CA when you later sold the company (but no longer lived there). Why would that be fair? What if you sold it 5 or 10 or 20 years after leaving? Part of the reason we don’t let CA tax you after you leave is because doing so opens up a can of slippery slopes, to mix metaphors.