Hi, I am Bette Hochberger, CPA, CGMA, and on today’s #TaxTipTuesday, we will be discussing business state taxes.
For many business owners, taxes can be a stressful time of year. Not only do you have to worry about filing your business’s federal tax return, but there are also state tax returns that you might have to file along with other business taxes.
Did your business earn income outside of your home-based state? Did you have employees out-of-state? Did your business expand to a state outside of your home-based state? If you answered “yes” to any of these questions, you might be subject to state taxes.
Each state has different rules on whether your business has “nexus.” Nexus is the connection between your company and the state that imposes taxes. Some states can even subject your company to state franchise and privilege taxes based on your business’s net worth and levied on your business’ right to do business in that state.
For example, if you have a Florida-based business that has sales, payroll, and offices only within the state of Florida and it is an S-Corporation or LLC, it would not have to file taxes in the state of Florida. However, if your business is a C-Corporation, it would need to file a Florida corporate tax return.
You might be asking what happens if your business does not comply with state reporting requirements? Well, each state can subject your business to various penalties, interest, and even the loss of your business’ right to conduct business within the state.
If you think you may have state tax reporting requirements or want to inquire about state nexus reporting, let us help you get the answers you and your business need. We are here to help you file your state taxes accurately. Set up a meeting with us by clicking the link I have provided.