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Old 11-24-2017, 02:21 PM
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Interstate Business Tax Obligations

Hi,
I have a question about corporate taxes for businesses which operate in several states. I know that in general a company needs to pay taxes in the states in which it generates its income, but what qualifies as generating income?

For example, if there is a company producing widgets with all of its manufacturing and operations in New Jersey, but they sell a portion of the products in New York, does this mean that New York state would be able to collect corporate tax on a portion of the company's earnings even though there is no physical presence in New York?

Any guidance would be helpful.

Thanks!



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Old 11-26-2017, 10:42 AM
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I have a question about corporate taxes for businesses which operate in several states. I know that in general a company needs to pay taxes in the states in which it generates its income,=>Correct agreed.
but what qualifies as generating income? ======>Business income may include income received from the sale of products or services. Corp can receive income in the form of money, property, or services. The annual business revenue is how much money a company generates in a year, whether from sales or interest from investment. Companies must keep up with annual revenue as it is a number used for tax purposes.




For example, if there is a company producing widgets with all of its manufacturing and operations in New Jersey, but they sell a portion of the products in New York, does this mean that New York state would be able to collect corporate tax on a portion of the company's earnings even though there is no physical presence in New York?===>it depends; in general,Most states will consider a company to have engaged in intrastate business when it has employees in another state, owns or rents real property, or uses a warehouse in another state to ship merchandise to customers in that state.then, the state A corp that conducts all its business across state lines, such as transporting goods from one state to another, is engaged in interstate business. Consequently, the company does not need to qualify to conduct business in the foreign state or pay state taxes. If you sell to customers that are located in another state and you ship the goods to them, you are not required to charge them sales tax unless you have also established nexus in that state (in which case you would charge that state's sales tax) or they come to your location to pick up the goods (in which case you would charge your state's sales/use tax), on the taxable goods or services you sell. But corps and S corps doing business, employing capital, owning or leasing property in a corporate or organized capacity, or maintaining an office in New Yorkstate/ City must file a General Corporation tax return.



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Old 11-27-2017, 10:23 AM
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Thanks for your guidance.



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