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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Experience:  10 years experience
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I own a business in the Oregon/ area where taxes for certain

Customer Question

I own a business in the Oregon/Washington area where taxes for certain products/services vary quite drastically over state lines. For example, services are better sold from WA, though more products from OR. This example is of course, dependant on the specific product or service that I offer.
Well, I'm looking to start a new business that will be providing businesses with wifi access points that will provide wifi and marketing services to them, for which the businesses will each be paying a monthly fee, so here's my question:
For tax purposes, which state, Oregon or Washington, would be the best (least amount paid to the IRS) to open and operate the business in? And what would be the best way to structure the pricing (i.e. charging the monthly fee for the access point product and providing the included marketing services for free, or vice-versa)?
Submitted: 2 months ago.
Category: Tax
Expert:  Barbara replied 2 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Your federal tax obligation is not affected by the state you open and operate the business.

You will need to research the pros and cons of establishing the business in Oregon or Washington as to your state tax liabilities.

As a bit of general information to get you started,

WA has use tax, personal property tax, B&O. You may have to charge sales tax on your business activities. WA has no state income tax on earnings.

OR has some similar taxes plus income tax on earnings.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Customer: replied 2 months ago.
Barb,This does not answer my specific question. Thanks anyway.
Expert:  Barbara replied 2 months ago.

I provided my answer to open a dialogue with you.

These were your specific questions:

For tax purposes, which state, Oregon or Washington, would be the best (least amount paid to the IRS) to open and operate the business in?

My answer was that neither will affect what is paid to the IRS. Federal tax liability is different from state tax liability.

And what would be the best way to structure the pricing (i.e. charging the monthly fee for the access point product and providing the included marketing services for free, or vice-versa)?

Only you can determine which pricing method to use that will provide the most profit for your business.

Customer: replied 2 months ago.
Since it apparently was not clear, Barbara, I am already an experienced business owner, not a beginner. My question is not pertinent to federal tax, nor did I mention federal taxes. And the pricing method I am asking about is how to best structure it for STATE TAXES.Please do not continue to reply to this question, you have not provided the information I am requesting.Thank you for your time.
Expert:  Barbara replied 2 months ago.

Not a problem.

Thank you.