{"id":633,"date":"2019-06-22T21:00:48","date_gmt":"2019-06-22T15:30:48","guid":{"rendered":"https:\/\/www.complianceprime.com\/blog\/?p=633"},"modified":"2019-06-22T21:00:48","modified_gmt":"2019-06-22T15:30:48","slug":"how-to-manage-your-business-tax-when-the-business-is-expanded-to-the-different-states","status":"publish","type":"post","link":"https:\/\/www.complianceprime.com\/blog\/2019\/06\/22\/how-to-manage-your-business-tax-when-the-business-is-expanded-to-the-different-states\/","title":{"rendered":"How to Manage Your Business Tax When the Business is Expanded to the Different States?"},"content":{"rendered":"<p><span style=\"font-weight: 400\">Different tax laws in different states complicate businesses. You may feel overwhelmed and confused by the different laws, both state laws, and tax laws. This is why conducting business in multiple states is sometimes difficult and confusing.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400\">Laws About Incorporation Of Business<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400\">If you are upto incorporating a new business, the best thing is to do it in your home state. By this you can <\/span><a href=\"https:\/\/www.complianceprime.com\/details\/364\/multistate-taxation-2019\"><span style=\"font-weight: 400\">avoid taxation problems<\/span><\/a><span style=\"font-weight: 400\"> arising out of involvement of multiple states. However, now that you want to branch out to other states after incorporating and successfully running the business in your home state, you need to decipher the different tax and state laws in order to prevent your business being pulled up by the taxman. It pays to know the laws about incorporation and conduct of business. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400\">The laws state that:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">If you desire to conduct business in a state other than the state of incorporation of the business, you have to register the business in that state. This is known as a <\/span><i><span style=\"font-weight: 400\">foreign qualification<\/span><\/i><span style=\"font-weight: 400\">. <\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">If you want to incorporate a business in a state other than the state where it is physically started, you need to file for a <\/span><i><span style=\"font-weight: 400\">foreign qualification<\/span><\/i><span style=\"font-weight: 400\">. <\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">If your partner lives in a state other than your home state and he or she has been engaging with clients near his or her home more than in your home state, you need to file for a foreign qualification in the state of your partner.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400\">What The Law Means By Business <\/span><\/h2>\n<p><span style=\"font-weight: 400\">This is the first thing that you need to know since if yours is not business as per law, you don\u2019t need to go into any detail of business law and taxation. In fact, in the virtual world that we live in, jobs need to be defined well so that one can delineate between business, freelancing, etc. If you\u2019re uncertain about your job and want to know whether it constitutes a business or not requiring acquiring a <\/span><i><span style=\"font-weight: 400\">foreign qualify<\/span><\/i><span style=\"font-weight: 400\">, Yours is a business, if:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">You operate out of a physical office in a state.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">You conduct a frequent meeting with clients in person.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">You earn an appreciable share of your revenue from a particular state.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">One or many of your employees work in that particular state and you pay state payroll tax.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">You applied for acquiring a business license in that state.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400\">Going by these definitions, if you are a consultant performing most of your job online and your clients are spread over a number of states, you need not file for a <\/span><a href=\"https:\/\/www.delawareinc.com\/ourservices\/foreign-qualification-for-corporations-and-llcs\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">foreign qualification<\/span><\/a><span style=\"font-weight: 400\"> since you are not conducting business. <\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400\">What is Foreign Qualification? <\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400\">Foreign qualification is an application for Certificate of Authority from the state\u2019s Secretary of State. You may also need to furnish a certificate of good standing from your home state or the state where your business has been incorporated or formed.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400\">Significance Of Foreign Qualification <\/span><\/h2>\n<p><span style=\"font-weight: 400\">Getting a foreign qualification is a legal obligation. So get to know precisely whether you need to get it or not. If you need, go for it since without it you may land in great trouble.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Different tax laws in different states complicate businesses. You may feel overwhelmed and confused by the different laws, both state laws, and tax laws. This is why conducting business in&hellip;<\/p>\n","protected":false},"author":4,"featured_media":634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[55],"tags":[54],"class_list":["post-633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-payroll-and-accounting","tag-multi-state-taxation"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/posts\/633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/comments?post=633"}],"version-history":[{"count":0,"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/posts\/633\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/media\/634"}],"wp:attachment":[{"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/media?parent=633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/categories?post=633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.complianceprime.com\/blog\/wp-json\/wp\/v2\/tags?post=633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}