Sometimes, the people you want to work with in business aren’t all in the same state. As a result, you might be held to different standards or face different laws that your business has to follow.
If you want to work with someone who is out of state, the first thing you should discuss is where to set up your business. It’s a good idea to choose at least one state that has more beneficial laws and better protections. The state where you choose to set up your business is called the state of organization. Your business will be “domestic” there.
In any other state where you do business, you may be termed a “foreign” business. You can complete intrastate business easily, but you may need to comply with special transaction rules, different tax laws and registrations that must be completed. If you plan to work outside the state of organization, you may need to go through state registration, which usually costs between $100 and $300.
After you register your company, you will be expected to pay state income taxes on profits earned in other states. For example, if you are domestic in Florida, you’ll pay fees for what you do in our state on the income that comes from here. You’ll pay different taxes on items that you sell in Ohio or Kentucky as well.
It’s important to know the rules when you work between states. It’s a wise choice to get more information from an experienced attorney before you decide on where you want to set up your business.