Legal Advice
Hi there, we sell products to all states through our e-commerce channel. Our LLC is Delaware incorporated, has an office location in NY, and a warehouse in NJ and CA. We've been getting annual report filing notifications from other random states (i.e., Kentucky, Virginia...) through our registered agents. We collect and remit sales tax to multiple states which hit economic nexus, but is it necessary for us to file for annual reports for each Secretory of State? Would appreciate a clear guidance/answer here. Thanks! Liah
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Answers
International Tax Attorney and U.S. CPA
This depends upon the state. Each state has a different definition of what constitutes "transacting business within the state" Some states will not regard selling products to customers physically present within the state as transacting business - it would require more of a physical presence on the part of the company (office location, warehouse location, remote employees are living and working within the state, etc). Other states, however, have very low thresholds for what constitutes engaged in business within the state. Selling products to customers within the state and collecting sales taxes would be sufficent in those cases, which is likely why you are getting annual report notifications.
Answered about 4 years ago