When a business entity moves out of a state, is it the final return?

Question

For a general partnership that files US Tax form 1065, there is a check box for Final Return which is not checked due to the partnership continuing on to the next year. However, the California state form 565 also has the same check box. If the partnership has been relocated out of state and thus will have no more business in California, should the box be checked even though the corresponding federal return does not have it checked?

I'm thinking not, since the partnership could potentially move back into the state again and thus it might not be the final return for the state given such a possibility.

Answer 1

I suspect you will need to consult with a tax professional on this one. In New York you would need to continue to file returns even if you did no business there until the partnership is dissolved. But I have no idea if Cali has anything rules like that. I would suspect since the partnership is on going the answer is no. Even though you plan no further business in Cali the potential exists that you could return there(even if only in theory).