California adopted new rules governing the tax treatment of intangible asset sales Wednesday, after years of debate and revision.
The rules from the Franchise Tax Board clarify how companies are supposed to assign sales in California—and how to approach sales of intangible items like government contracts and asset management fees—where determining the location of the benefit of the sale isn’t possible. The rules, which take effect Oct. 1, will apply to “taxable years” starting on or after Jan. 1, 2026.
The new rules were made necessary by the state’s switch to a single-sales factor formula, which became mandatory in ...