Here's a quick way to determine whether or not you are or will be a part of the California tax system. Answer the following questions:
Do you live in California?
Do you have any employees (including yourself) who work in California?
Do you own real estate in California?
Do you have a business location in California?
If you answered "yes" to any of those questions then you are or will be part of the California tax system.

Don't be swayed by less reputable operators who promote incorporating in Nevada to avoid paying California tax on income made in California. It isn't true, and that advice will get you into trouble. Sometimes it makes sense to use a California entity for your California business activities and use another, non-California entity to conduct all of your non-California (and even worldwide) business activities. Or, if you are living in and doing business in California and want California-based limited liability protection (which is weaker) without extra out-of-state fees, then forming a California entity may be your choice. However you should at least consider forming in Nevada and Wyoming, which have superior asset protection laws, and then qualifying in California. While there is an extra cost involved it is another form of insurance; the benefit of more protective state laws may be used to your future advantage.  Corporate Direct can assist with qualifying your Nevada or Wyoming entity into California.

California Incorporation Package
Sutton Law Center’s California corporation, LLC and LP formations are complete and include the following:

• All initial organizational filings with the California Secretary of State
• One-year of Corporate Direct member benefits
• One full year of California registered agent service
• Preparation of Bylaws, Operating Agreement or Limited Partnership Agreement
• Initial Meeting Minutes
• Issuance of Stock, Membership Interests or Limited Partnership Interests
• Corporate Minute Book
• Corporate Name Check
• Instructions and forms for obtaining a Federal Employer Identification Number (EIN)
• Our $49 book, Bulletproof your Corporation, Limited Liability Company and Limited Partnership
You get all of this for $695 (plus applicable filing fees).  If you form three or more entities with us the price per entity is $595 each (plus applicable filing fees).