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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29644
Experience:  Taxes, Immigration, Labor Relations
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person a formed a company in new york, lives in texas, but

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person a formed a company in new york, lives in texas, but the managing general partner for the company is in massachusetts. does it matter if on form ss-4 (application for ein) a writes down the general partner's address in massachusetts? would a be taxable in these three states, or only in the states where the company makes money (new york) and where a lives (texas)?

Lev :

Hi and welcome to our site!
For state income tax purposes - income is taxed if that is income from sources within this state.
If that company performs business activities in each of these states - then - yes - it will be under jurisdiction of all these states - and may be subject of taxation.
For SS4 purposes - any address may be used - it may be a mail forwarding address, personal address, PO box, address of the attorney, etc - that is a mailing address and doesn't indicate if the company performs any business activity at this location.

Lev :

Because the company is formed in NY - it is under NY jurisdiction - and without other consequences - it is assumed that all income from NY sources.
If the owner performs services for the company out of his TX dwelling - that could be classified that the company conducts business activities in TX - and as such - it must be registered there.
Similar - if the managing general partner performs services for the company out of his MA dwelling - the company would be regulated by MA business and tax laws.

Lev :

For state income tax purposes - taxable income must be allocated - so generally - the same income would not be taxed in several states. The complication comes because allocation rules are different for each state - and each will ask for the "fair share" of their tax.

Lev :

However the question if a specific entity conducts business activity in the state might be not so simple ans again - each state has their own rules and regulations this matter.
For instance - the New York Department of State does not give opinions on what activities constitute doing business in New York State for qualification purposes. You may wish to review an Opinion of Counsel entitled "Doing Business" in New York: An Introduction to Qualification - http://www.dos.ny.gov/cnsl/do_bus.html
This publication provide references to statutes and court cases as that related to determination of "doing business" in NY.
Similar regulations are in TX and MA.

Customer:

thanks, XXXXX XXXXX lot of information to digest!

Lev :

Take your time. Unfortunately that is a very gray area.

Customer:

so if the company did not perform business in the state of its gp, then even though on form ss-4 it states its principal address is that of the gp (massachusetts), it is not subject to ma taxation?

Customer:

also what is considered 'doing business' ini another state? or is that part of the gray area?

Lev :

Yes - there is no "clear cut" to determine if the company is doing business within the state. As an example - you may review this publication - an Opinion of Counsel entitled "Doing Business" in New York: An Introduction to Qualification - http://www.dos.ny.gov/cnsl/do_bus.html

Customer:

okay, thank you!

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