Assume a California resident sets up an out-of-state trust, which in turn is the only member (and manager) of an out-of-state LLC for business in another state (e.g. holding rental properties outside of California). Is there any reason to believe that the California taxpayer in this case will be required to pay the annual $800 minimum franchise tax to California?
There is so much mixed information out there on the CA franchise tax, so it would be really helpful if any kind folks willing to weigh in could do so with authoritative sources of information, e.g. tax code / legislation, previous court cases, or even FTB publications. I've read through quite a bit of those sources myself and have yet to find anything suggesting that the minimum franchise tax would be assessed on this kind of entity structure. And no one I've spoken to has been able to offer a compelling argument otherwise. Yet many claim that there’s no getting around it as a California resident. Obvious disclaimer: I'm not an attorney or accountant. I'm just a dude with an inclination to sort through mixed messages until I get the story straight. And I fully admit I could be missing something- am I?