Would a Texas LLC Have a Calif. Franchise Tax Nexus?

[Scott Mac]

A tax question (that reads like a test question, but it's really not that complicated).

Do any Tax Experts want to weigh in on this potential investor question?

If a Texas LLC has any investors in California, does this create a Calf. franchise tax nexus (filling, paying) to California?

If the Calif. investor owns Property Owner (Texas) LLC via a Texas Series LLC will that remove any Calif, franchise tax nexus from the Texas property owner LLC.

The goal would be to push the Calif. Franchise Tax filing, and tax payment responsibility to the Calf. residents only, without having to register the Property Owner Texas LLC in Calif. and to not have it have Property Owner (Texas) LLC to file or pay Calif. tax. But have the Calif. resident handle his own states responsibility without burdening the non Calif. residents with it, or with any liability for it.

The Facts

Manager managed Texas LLC owns real property in Texas (Property Owner LLC).

Manager/member (1) is a member managed Texas series LLC (series A) both member are Texas Grantor Trusts of Texas residents.

Manager/member (2) is a member managed Texas series LLC both members are Calif. residents (husband and wife).

Manager/member (3) is a single member Nevada LLC whose sole member is a Calf. resident.

Non-managing member (1) is a Texas Grantor Trust of Texas residents.

Non-managing member (2) is a Texas series LLC (series C) both members are Calf. residents (husband and wife).

Any input on this is appreciated.

Thanks Scott...

[Basit Siddiqi]

@Scott Mac

Looks like a really complex ownership structure.

Looks like there will be some California nexus since it looks like the ultimate people managing the affairs live in California.