May 1, 2026
Court of Appeal of the State of California, First Appellate District, Division Three
The Rule of Garcia-Rojas v. Franchise Tax Board is that a nonresident sole proprietor engaging in only one business activity cannot constitute a "unitary business" for purposes of California taxation under regulation 17951-4(c), under circumstances where the taxpayer operates a single-activity sole proprietorship receiving compensation from one entity, even when that entity's clients are located both within and outside California.