2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 17 - Allocation of Income › ARTICLE 2 - Uniform Division of Income for Tax Purposes Act › Section 25141.

25141. (a) For purposes of this section, the following definitions shall apply:
(1) “Entity” means an individual, corporation, association, partnership, limited liability company, estate, trust, or any combination thereof.
(2) “Person” means an individual or corporation.
(3) “Professional athletic team” means any entity which has all of the following characteristics:
(A) Employs concurrently during the taxable year five or more persons, who are compensated for being participating members of an athletic team engaging in public contests.
(B) Is a member of a league composed of at least five entities which are engaged in the operation of an athletic team and which are located in this and other states or in other countries.
(C) Has total minimum paid attendance in the aggregate for all contests wherever played during the taxable year of 40,000 persons.
(D) Has minimum gross income in the taxable year of one hundred thousand dollars ($100,000).
(b) For purposes of this chapter, a team shall be considered to have its operations based in the state or country in which the team derives its territorial rights under the rules of the league of which it is a member.
(c) The business income of a professional athletic team derived directly or indirectly from its operations as a professional athletic team shall be allocated to this state pursuant to the following three-factor formula:
(1) Computation of the property factor under Section 25129:
(A) For a team that has its operations based in this state, the average value of all real and tangible personal property, wherever located, and owned or rented and used during the taxable year, shall be deemed to have been owned or rented and used in this state during the taxable year.
(B) For a team that has its operations based outside of this state, the average value of all real and tangible personal property, wherever located, and owned or rented and used during the taxable year, shall be deemed to have been owned or rented and used outside this state during the taxable year.
(2) Computation of the payroll factor under Section 25132:
(A) For a team that has its operations based in this state, the total compensation paid everywhere during the taxable year shall be deemed to have been paid in this state during the taxable year.
(B) For a team that has its operations based outside of this state, the total compensation paid everywhere during the taxable year shall be deemed to have been paid outside this state during the taxable year.
(3) Computation of the sales factor under Section 25134:
(A) For a team that has its operations based in this state, the total sales everywhere during the taxable year shall be deemed to have been made in this state during the taxable year.
(B) For a team that has its operations based outside of this state, the total sales everywhere during the taxable year shall be deemed to have been made outside this state during the taxable year.
(d) If any team that has its operations based in this state is required to allocate or apportion a part of its business income derived directly or indirectly from its operations as a professional athletic team to another state or country by the laws, regulations, or requirements of the other state or country and pays an income or franchise tax measured by income thereon as a result of the allocation or apportionment, then all of the following shall apply:
(1) The business income of the team otherwise subject to this section shall be reduced for purposes of this section by the amount of the business income which is allocated or apportioned to and taxed by the other state or country.
(2) This section shall not apply to any team in the same league that has its operations based in the other state or country, and the business income of any such team derived directly or indirectly from its operations as a professional athletic team shall be allocated or apportioned to this state in a manner consistent with the method of allocation or apportionment imposed by the other state or country on the business income of the team that has its operations based in this state.
(e) For purposes of the minimum tax imposed under Sections 23151 and 23151.1, an entity which operates a professional athletic team shall be treated as a corporation. The liability under Sections 23151 and 23151.1 of any corporation owning any portion or share of an entity shall be satisfied by payment of the minimum tax by that entity, if the corporation is not otherwise doing business in this state.
(Amended by Stats. 2000, Ch. 862, Sec. 226. Effective January 1, 2001.)