Income tax question for an LLC

August 24, 2004 11:51 AM

If one has a business that is registered as an LLC (with no partners-- just the one person) and if: the business location (office) is in one state, the owner lives in another state and most of the business (or clients) are in a third state in which state is state income tax due-- where the office is, the owner's residence or where the clients are?
posted by limitedpie to work & money (3 comments total)

Get yourself a lawyer and a good CPA or a small business accountant. It is worth the time and money so you aren't audited by the IRS and/or all three State Attorneys General.
posted by plemeljr at 1:20 PM on August 24, 2004

Seconded. This is one of those instances where getting advice from from a paid, licensed professional liable for the accuracy of his/her comments is the only way to go. At the very least, speak directly to the IRS and the states' equivalent.

If I had to guess, it's probably that either you or the biz have to file in each of those states but it's up to the individual states' laws to determine whether there's $$ due on the return. Oh and don't forget that in addition to income tax, there may be sales tax issues to work out with one or more of them.
posted by nakedcodemonkey at 4:18 PM on August 24, 2004

Yes. I would certainly seek a CPA's opinion prior to making any real decision-- but was simply discussing with a friend the peculiar tax situation of Vancouver, WA. In WA there are no state income taxes, and in OR (directly across the river) no sales taxes. The question was simply trying to understand if (generally) someone who could telecomute would have the ultimate tax situation by living in Portland (with no sales tax) and having the business in WA. I called a CPA an hour ago. Turns out (acc'd this CPA) a single member LLC pays state income taxes in the state where the single member lives, regardless of the business address. If the business is in WA there is an additional tax called the B+O (or something like that) tax. So, Vancouver is no tax haven... Thanks plem and nakedcodemonkey for your input.
posted by limitedpie at 7:22 PM on August 24, 2004