Doing Business in Multiple States

The state where your principal business activities happen is where you
should register your business. If you begin doing business in other states,
you will need to obtain a certificate of authority, or certificate of foreign
business, from those states.

States define “business activities” differently – what’s considered doing
business in one state, may not be the same in another state. For detailed
information on a particular state’s requirements, contact our office for
assistance in determining what constitutes doing business.

You can get permission to do business in states where you are not registered
by providing documentation about your business, pay a filing fee, and
declaring a “registered agent” for your business in that state. A registered
agent is someone with a permanent address – not a P.O. box – in that state
who is authorized to serve as your business’s agent. A registered agent can
be a partner, an employee, or a third-party, but it should it be someone that
you trust to handle business matters.

Just as state requirements vary, so do their exceptions. Depending on the
state, exemptions may be available if your business is conducting infrequent
transactions, or conducting sales solely through a web site, or for other
reasons the state deems acceptable. Our office can assist you in determining
whether you may be eligible for an exemption in a particular state.

The state most of your business income is generated is usually where your
business is registered . In this case, your home state will tax the bulk of
your business income. Other states where you do business will tax the
income that you earned in that state. In some cases, your home state may
tax all your income and offer a credit for the taxes that you pay to other
states. Contact our office immediately for up to date tax planning advice.

Note that some states do not collect income tax – but that doesn’t
necessarily mean the income is tax-free. Your home state’s taxation office
may require you to report it with them. For more detailed tax information,
contact our office.

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