Business in Multiple States

[tacimala]

Hi all, I could use some advice. I am in the process of setting up my LLC and plan to include a DBA under the LLC for each of the domains that I run. Until now, everything is done in Michigan so I'm operating under Michigan laws and forming my LLC in Michigan.

Now, I would like to start an advertising website based out of Ohio and just use a DBA under my Michigan LLC business, but I was informed by my lawyer to check up on this first. Does anyone have any experience with this field or Michigan/Ohio specifically? I won't be selling any goods on the website nor accepting credit card payments on the site, if that helps.

Thanks in advance!

[bhartzer]

You're in Michigan. Do you plan on opening a physical office in Ohio? If not, then there's probably no real need to set up a separate website, separate LLC, etc. I would stick to one website at the moment--it's hard enough to promote one business online let alone more than one.

If your business is going to be online only then you could actually be getting business from anywhere in the country or anywhere in the world for that matter. So, where you are located is insignificant, really.

[tacimala]

No, I don't plan to open an office there. I just want to start a new online directory for a specific town in Ohio. So businesses in that town in Ohio would be paying me to be listed on this site. I don't want to start another business for this, I just need to know if I am allowed to operate in multiple states in that fashion.

[PeggyR]

Dear tacimala,

The IRS only cares about where you physically own and operate your business. For example, I sell products nationwide yet I do not need a tax ID for each and every state (wouldn't that be a nightmare? Ugg!) According to the IRS and my State Comptroller, I can have as many DBA's under the same Federal & State Tax ID #. I am responsible for collecting and paying taxes for transactions made within my own state. (ie) Texas to Texas transactions.

You can try checking out http://www.irs.gov/ for more information or call your Michigan State Comptroller if you have any questions. In my own experience, calling my State Comptroller was faster and easier.

I hope this helps,

Best regards,

[attard]

Another way your life could be complicated is that you would probably have to file State income tax returns for Ohio (or whatever other states you locate offices in.) Tax law gets complicated, so if you still think you want to open an Ohio office, check with an CPA or enrolled agent first to learn the tax consequences.

[iamrussell]

Hi! I run IncLaunch.com (http://www.inclaunch.com). If you don't have a physical address in Ohio then you don't have to worry about anything. If you did then you might want to consider forming a Foreign Corporation. Although, many companies do not do this. It all depends on what you believe your liabilities will be. Regarding taxes, you say that your not making any income from this website so there is nothing to report. If you were, then you could say that the client is coming to you to do business in Michigan. And for the DBAs, remember that they are only good for so many years. Check your state and don't forget to re-apply.

[sbeco]

I own an LLC, and since my online business doesn't sell hard goods or a service I am only required in Louisiana to pay federal taxes.

Selling memberships and digital products are exempt from state taxes here in La. Michigan probably has the same set of rules.

I'm fairly sure you can have a membership directory for all 50 states and not pay any state taxes, even in your own home state. Why? Because you wouldn't be selling hard goods, like auto parts shipped from your company's warehouse, nor would you be selling a service such as a computer repair service that makes house calls.

If I sold a service or product that requires a separate physical location in more than one state, then I assume I would have to pay state taxes in each state.

So, when it comes to paying state taxes, that will depend upon what you're selling and where you sell it.

I hope this helps.

[ellenthompson]

We also sell advertising in many states and we have one business in one state (PA). One of my partners is a CPA and we have good access to accounting help, so I am certain about this.

However, if you employ people in other states, you will have to deal with local payroll tax issues. We use Paychex (ADP is another option) and they handle all of these issues.

Hope this helps.

[tacimala]

OK great thanks all for the information. Since I don't sell any taxable goods and don't plan on ever opening an office in Ohio it looks like I can just do everything from Michigan without causing any problems. I only sell a service as well, so taxable goods is not a problem within my state either.

[DrTandem1]

Why are you making this so complicated? Internet traffic comes from all over the world. If you want to focus sales on a specific geographical location other than where your business resides, that is not a problem.

Many companies incorporate in states other than where their business is located. States such as Delaware have been favorites. One of the reasons for incorporating or using an LLC is to separate your personal finances from that of the company's.

If you want to find out 100 reasons why you can't do something, ask a lawyer. They are trained to look for problems, not solutions.