Yesaustincpa wrote:Based on this, would I be required to file an S Corp return for each state as well as an individual non-resident return?
austincpa wrote:Would the entity have to register in each state year to year?
austincpa wrote:These are often large one time contracts
ManVsTax wrote:Prefacing that I'm not an attorney, but why would a business register as a foreign entity with the state's secretary of state if the business' only connection to the state is that clients are within the state and receive the benefit of services there? Do most states have an economic nexus for "doing business" in this context?
JAD wrote:Definitely for CA. The relevant case is Bindley. The OTA said income paid by the CA company was CA sourced. They ignore economic nexus thresholds for services. https://ota.ca.gov/wp-content/uploads/s ... 053019.pdf
You said that the returns have not been filed in prior years. Be sure to CYA. State in writing that returns are required and that they remain exposed for prior years and that the statute of limitations does not run on returns that were required and not filed. I have seen CA come after someone 20 years later....the annual $800 plus taxes and interest gets expensive.
Of course, the atty should check SOS filing requirements. He probably has to register.
Going forward, don't forget about the S corp's ability to pay the PTE to get around the SALT cap. You are too late for 2022 unless they change the law. Payments was due 6/15.
Jeff-Ohio wrote:Seriously consider zeroing out the profit via W2 wage payments to the owner(s). Not great from a FICA standpoint, but if some state says, “You should have filed with us!” then you can file there, knowing that an X% apportionment percentage times a zero profit is $0.
Users browsing this forum: No registered users and 87 guests