Everything is taxable in California. The California Franchise Tax Board (FTB) takes a very agressive position on when a LLC needs to be registered in California. Their view is if a member of the LLC makes one decision for the LLC, writes or signs one check for the LLC, makes one phone call regarding the LLC and anything else you can think of while that members is in California then that LLC has to be registered in California and file LLC tax returns with California. That is a totally ridiculous position. Next, they will try to tax business owners as they fly over the state!
This is all part of the “Nexus” fight where States tax out of state businesses.