This one is for the people who were in my Foreign Investment in U.S. Real Estate class yesterday in San Francisco.
In re B & G Properties, Inc. (PDF) is an opinion from the State Board of Equalization that helps you answer the question “Does this foreign corporation register with the Secretary of State?”
The answer is that a corporation which passively owns a California house which is used for personal purposes is not “doing business” and therefore does not have to qualify to do business in California.
This is not precedent. But the logic is right.
Of course, the Franchise Tax Board believes that everyone, everywhere, should pay tax in California. No matter where you live, no matter what you do, if you ever thought about shaking hands with someone who once had a secret thought about a postcard with the word “California” on it — you have to pay tax in California.