How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Irwin Law Your Own Question

Irwin Law
Irwin Law, Attorney
Category: Business Law
Satisfied Customers: 4968
Experience:  30+ yrs. representing small business, real estate, probate
18215332
Type Your Business Law Question Here...
Irwin Law is online now
A new question is answered every 9 seconds

I started selling virtual goods online for a massively multiplayer

Resolved Question:

I started selling virtual goods online for a massively multiplayer online game with a partner who resides in another state. We looked into incorporating for tax purposes, but are left with the question of which state to incorporate in. The problem lies in the question, "what constitutes doing business in a state." Our business would maintain no physical presence, we don't advertise directly to residents of either of our states, we don't exchange any tangible goods and the majority of our customers come via an intermediary website that functions like ebay. None of their personal information is shared with us, so there's no way for us to even know if we're selling goods or services to people in our resident states. We were thinking of incorporating in Delaware for the tax benefits, but the same question of doing business with a state applies. As far as I can tell, laws regarding virtual goods are largely unwritten, so how do I go about reporting the income without being surprised by one government entity or another demanding back taxes at some point?
Submitted: 1 year ago.
Category: Business Law
Expert:  BizIPEsq. replied 1 year ago.

BizIPEsq. :

Hello, I will be assisting you

BizIPEsq. :

Let me review the question

Customer:

One of the most important issues to us is whether we'll have to register our LLC with each of our states of residence. As I understand it, we're required to pay ourselves a wage, so our LLC would have employees working in two different states. Does having an employee in a state count as "doing business in" the state, even though the employee works from home and does the entirety of their job is working online?

Expert:  Irwin Law replied 1 year ago.

Hello. Another expert here. Perhaps I can assist in this answer. Being a member of an LLC or a shareholder of a corporation does not require the entity to register to do business in that persons state of residence. You only have to register the business in states where you actively do business. That doesn't include mail order or on line sales. You should check on the sales tax aspects of your business though because that might be an issue, depending on the nature of your business.

I hope this information is helpful and that you will enter a positive rating. I thank you for submitting your question to Pearl-Just Answer. We appreciate your business. If you need clarification or additional information, please send me a Reply and I will be happy to explain further. Please consult a local attorney to verify the accuracy of this information according to your state's laws.

Customer: replied 1 year ago.

If I'm required to pay myself a wage, however, wouldn't I need to register the LLC with my state of residence in order to receive a state employer id number for tax purposes? Or do I only file my income with the state I incorporated in, ignoring my state of residence?

Expert:  Irwin Law replied 1 year ago.
Your corp or llc files taxes with the state of incorporation or registration. You file personal income tax in the state where you live. You will receive a K-1,1099 or other notification of wages that are paid to you which you file with your personal income tax return.I hope this Answer is helpful and that you will give it a positive rating. If you have any follow up questions please send back a Reply. You should consult a local attorney to verify that this information is accurate for your state. Thank you for using Pearl.com- Just Answer. We appreciate your business.
Irwin Law, Attorney
Category: Business Law
Satisfied Customers: 4968
Experience: 30+ yrs. representing small business, real estate, probate
Irwin Law and 6 other Business Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1767
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1767
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1495
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1174
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    504
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    373
    14 years practicing attorney, MBA
 
 
 

Related Business Law Questions

Chat Now With A Business Lawyer
Irwin Law
Irwin Law
189 Satisfied Customers
30+ yrs. representing small business, real estate, probate