Taxpayer, a nonresident of California, licensed X to conduct his copyrighted courses in a prescribed area of California. Although the contract appears to give X an exclusive right to conduct the classes in X's particular area, taxpayer retained the right to conduct certain other courses in said area, however it appears that this right was never exercised.
Advice is requested as to whether the royalties are income from California sources.
As the taxpayer's courses are copyrighted, income received from the use of the copyright is royalty income. Nor does the taxpayer conduct a trade or business in California in such a manner as to give the income a source in this State. Under the circumstances the royalties received from X are not taxable under the Personal Income Tax Law as income from California sources.