Small Business Taxes
Whether you are a new business opening up shop or have been around for a while and are expanding to locations in additional states, it's important to understand your state business tax obligations.
To avoid penalties and unexpected surprises that undermine profitability, it's important for business owners to fully understand their state tax obligations.
Every state levies some form of tax on small businesses, but in some states some business structuress (especially sole proprietorships) have little to no tax imposed.
If have employees, you probably will need to pay state employment taxes. This can include unemployment insurance tax, workers' compensation insurance and temporary disability insurance. You will also likely be responsible for withholding state income taxes from your employee paychecks.
Whether you need to file business taxes in a given state will depend not only on your entity type but also on your company size and whether you are in state or out of state. In some cases, even having one employee working in a state can require you to apportion business income to that state based on any customers you may have in the state.
To learn more about tax structuresin any given state, it's best to consult with your tax preparer and to visit the taxing authorities in each state.
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Additional Resources for Entrepreneurs
Do you have questions or comments about business obligations for state taxes? We welcome all comments, tips and advice.