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When Does a Business Need to File Taxes in Another State?

Short answer

A business may need another state’s income, franchise, payroll or sales tax filing when its activities meet that state’s rules. The answer differs by tax type and jurisdiction.

Why this matters

Employees, offices, inventory, property and sales can matter. Economic thresholds may apply for some taxes, while other taxes depend on physical activity. Registration with a secretary of state does not by itself answer every tax question.

Example

A Georgia company hires a remote employee in another state. That can trigger payroll withholding and other registration reviews even if the company has no storefront there.

What to review

Map people, property, inventory, sales and services by state; review each state’s current thresholds and filing instructions.

Official source: www.irs.gov/businesses/small-businesses-self-employed/state-government-websites

Related service: International & Multi-State Tax

This answer is general information, not advice for your specific situation. Tax rules change, so please contact us to review your facts before acting.

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