It's not exclusively defined as living in California, but if you live in California and have an LLC, it almost certainly requires registration in the state:
For taxable years beginning on or after 1/1/2011, a taxpayer is doing business in California if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California or if any of the following conditions are satisfied:
> The taxpayer is organized or commercially domiciled in California.
> Sales, as defined in subdivision (e) or (f) of R&TC 25120, of the taxpayer in California, including sales by the taxpayer’s agents and independent contractors, exceed the lesser of $500,000 [1] or 25 percent of the taxpayer's total sales.
> Real and tangible personal property of the taxpayer in California exceed the lesser of $50,000[1] or 25 percent of the taxpayer's total real and tangible personal property.
> The amount paid in California by the taxpayer for compensation, as defined in subdivision (c) of R&TC 25120, exceeds the lesser of $50,000[1] or 25 percent of the total compensation paid by the taxpayer.
> For the conditions above, the sales, property, and payroll of the taxpayer include the taxpayer's pro rata or distributive share of pass-through entities. "Pass-through entities" means partnerships, LLCs treated as partnerships, or S corporations.
So if your 'HQ' is in California, if 25% of your sales are in California, if more than 25% of your property is in California, or if more than 25% of the total compensation you pay is in California, you need a California LLC.
Normally I’m pro simple answers but I think this answer over simplifies a bit too far. When it comes to allocating state revenue just having a presence in a state doesn’t mean as much as “where services are performed” or products sold. It’s a heck of a dance dealing with these issues some tax time.
