State Tax Consideration
Resident vs. Non-resident State
In addition to the federal income taxes, if you are considered as a state resident for certain state which has state income tax, you are required to file and potentially pay the state and local taxes. For business, if your entity is conducting business predominantly in one state, your business must also pay certain state and local taxes. Tax laws vary by state for domicile resident. For small business, the most common types of tax requirements are income taxes and employment taxes.
Income Taxes
Your state income tax obligation is determined by the legal structure of your business. For example, LLCs are taxed separately from the owners, while sole proprietors report their personal and business income taxes using the same form. Consult the General Tax Information link under your state for specific requirements.
Employment Taxes
In addition to federal employment taxes, if you have employees you are also responsible for paying certain state employment taxes such as workers’ compensation insurance and unemployment insurance taxes. The following states/territories also require a business to pay for temporary disability insurance:
- California
- Hawaii
- New Jersey
- New York
- Rhode Island
- Puerto Rico
If you are deemed to be considered as a non-resident for certain state for part of the year or the full year, you might require to file a non-resident state tax return (if state requires) to report your non-resident state source income.
We are familiar with most of the state filing requirements for residents or non-residents. Please consult us if you have any questions.
