Teleradiologist Avoids California Tax on Work Performed in Texas

A Texas-based radiologist isn’t subject to California income tax on what he earned reading images remotely for hospitals there, a California appeals court ruled Friday, just two days after oral arguments.

Dr. Xavier Garcia-Rojas asked the California Court of Appeal, First Appellate District, to overturn a trial court order that he operated a “sole proprietorship which carries on a unitary business” that was required to apportion its income among the states where it provides services.

Garcia-Rojas doesn’t operate a unitary business, which has long been understood as two or more business entities commonly owned and integrated in a way that ...