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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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We own an LLC registered in the State of Delaware but are residents

Customer Question

We own an LLC registered in the State of Delaware but are residents of PA. Only a small portion of income is derived from customers in PA (about 4%). The remaining income is from business actually generated in NJ. What state K-1's are we responsible for filing?
Submitted: 4 years ago.
Category: Tax
Expert:  Mark D replied 4 years ago.
Bill,

An LLC taxed as a partnership in your situation would have K-1's reflecting apportioned income to both PA and NJ. A Delaware LLC or corporation does not have a filing requirement in Delaware unless it actually conducts business in that state. Please be aware you may also need to register as a foreign LLC with both the PA and NJ Secretary of State Offices. Please let me know if you have further questions.

Regards,

Mark D
Customer: replied 4 years ago.
Thanks for the info. Question is.... what does "may" also need to register as a foreign LLC with both PA & NJ mean? Must we or not? If it's not a must, then how would we apportion taxes in those states in which we conduct business? We haven't investigated NJ's revenue website, but PA doesn't seem to show anything about foreign LLC's with resident partners having to file anything from what we see. PA only seems to be interested in PA partnerships, not foreign partnerships with resident parnters.
Expert:  Mark D replied 4 years ago.
Bill,

PA requires foreign LLC's to register with the Secretary of State in order to conduct business in PA. New Jersey requires the same. Please click on the links for reference. Please let me know if you have further questions.

Regards,

Mark D
Customer: replied 4 years ago.
Last question Mark-- does it matter if no nexus exists in either state? Orders are being taken electronically and we are paid commissions as independent agents by a third party (out of Illinois).

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