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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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S Corporation doing business in multiple states

Resolved Question:

Client owns a Maryland S Corporation and are residents of MD. Their S Corporation does business or provides services in both Virginia and DC. Does the S Corporation have to file a return in either VA or DC? Do they have to file a personal return in either VA or DC?

Thank you, XXXXX XXXXX you have any other items I might need to address I'd like to hear about them as well.
Submitted: 8 years ago.
Category: Tax
Expert:  RD replied 8 years ago.

Yes, if the S Corporation does business in VA & DC than you need to file the S Corp tax return in both VA & DC.

To the extent there is income in VA & DC, the shareholders may be required to file a personal tax return in VA & DC

Normally States require S Corporation to register in their State as a foreign corporation in order to transact business in that State. You may want to check with Department of State in each State to determine the requirements.

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

Customer: replied 8 years ago.
Reply to RD's Post: Does this mean they would have to allocate income and expenses to each state to determine the amount of income. If yes is there a formula for doing this other than by percentage of sales?
Thank you.
Expert:  RD replied 8 years ago.

Yes, you would be required to allocate income and expenses to each state.

Most States allow apportionment using the three factors- sales, payroll or property.

This would involved detailed research for each particular state in question. I would suggest you to review the instructions to the tax return for each State for specific information.

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Customer: replied 8 years ago.
Reply to RD's Post: Thank you, XXXXX XXXXX accept your answer but I wanted to first ask you if I need any additional information how would I get in touch with you?
Expert:  RD replied 8 years ago.

You can either post a question and request me on the post or send me an email from your just answer account.

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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