Doing Business in Multiple States: What You Need to Know
Growth across state lines is a good problem to have — but every new state adds its own registration, tax, and reporting obligations.
Entity registration
Foreign qualify in each state where you're transacting business, keep a registered agent there, and file that state's annual report on its schedule.
Employees
Hiring a remote employee in a new state usually means registering for that state's payroll withholding and unemployment insurance, and following its wage, leave, and workers' compensation rules.
Sales tax
Since the Supreme Court's 2018 Wayfair decision, states can require out-of-state sellers to collect sales tax once they pass an economic threshold — commonly $100,000 in sales into the state, and sometimes a number of transactions.
Income and franchise taxes
States can tax income or impose franchise taxes on businesses with sufficient connection (nexus) there. Rules differ widely; a CPA familiar with multi-state tax is worth consulting.
Stay organized
- Keep one list of every state you're registered in, with agent details and deadlines.
- Review new hires, new contracts, and sales by state each quarter.
- Withdraw registrations from states where you've stopped doing business, so fees and reports don't keep piling up.
Related service: Business Registration Services →