We are a Corporation based out of Massachusetts, U.S. We deal with foreign vendors and some of the vendors performed services in the United States. Hence we file 1042-S & 1042 forms with Internal Revenue Service. As I stated some of the services performed in the United States, do we need to look for the "State" also where the vendor performs services? Do we need to file the state tax return?

Scenario - I have found a foreign vendor who has performed services in the California, do I need to withhold 7% on the vendors payment and report the payment to the California government on the 592 forms, when I'm already filing federal tax return?

Please can-anyone answer to this questions..