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allocation of income for content subscription

A company (partnership) sells access to digital content. Sales are to people in nearly every state plus many foreign countries. Nexus doesn't exist for income tax purposes unless an employee works in a state or if the company owns property there. There are five states in which the company has an employee (Arizona, Kansas, Maine, Oregon, and Utah) so the company has to file in those states. Does it have to allocate revenues to those states?

(If it was my company, I would require employees to live in a state without an income tax.)

Thanks, Gary

Reply to
Gary Goodman
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Yes, in every state you have to allocate how much income was earned in that state. The company also needs one main state where the headquarters are located, and that business tax return will include the worldwide income.

Many states that have no personal income tax still have a business income tax. I think TX and FL have business income taxes, not sure about the others.

Reply to
remove ps

Assuming the employees aren't district salesmen or the like, what connection would the location of the employees have to the location of the revenue?

Reply to
John Levine

Most states use a formula to apportion income to that state. The typical formula uses one or more of the following: % of sales in the state, % of property located in the state, % of payroll paid to employees in the state.

Ira Smilovitz

Reply to
ira smilovitz

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