MULTI-STATE
Compliance
Over the last few years, the market has experienced a plethora of changes in multi‐state taxation for service businesses. The answer on whether a company doing business in another state constitutes a filing requirement is hard to discern. If you are in a service business, you may think that your business is only required to file in the state you reside in because your office is located in that state, but that may not be true.
Witzig CPA is certified to file a state tax return for a business or individual in any state within the U.S.
Nexus Issues
Under the “Market Based” sourcing method, you must look to the client's location to source the revenues. For example, if your business's client is in New York, then that revenue is New York sourced revenue because they received the economic benefit of those services in New York. Not every state is market based, however, but most are moving in that direction.
Additionally, many businesses have started to offer a remote work option and have recruited talented individuals in other states. However, having an employee in another state creates a "physical presence" there, and may require you to file a tax return in that state.
Witzig CPA can help determine your state filing requirements.
PTE Elections
Many states are now offering what is called a "pass-through entity tax election" (PTE), geared towards realizing a benefit from state tax deductions that were formerly capped on the Schedule A.
Witzig CPA can help you get you on track to realizing this benefit.
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