Forums: Discussions for entrepreneurs and small business.

I`ve been told that in the following example, my business would owe taxes in the state of New Jersey:

 

1) Incorporated in Delaware,

2) Doing business in New York State

3) Live in New Jersey (but do NO business there)

 

Does anyone know if this is really true?   Doesn`t seem rational...!

 

- da

 

 

 

 

Hi Larry,

 

This was a question I posed to my accountant, and concerns a new business entity I would be starting.   There are a combination of factors that might be pertinent:

 

I do indeed reside in NJ.  But my work is consulting in the New York (I work on site, NOT from home).  We`re thinking of moving out of state, so my thought was to purchase investment property in DE, rent it, then move into it later (say 10 years from now).   If there were legitimate tax savings, it seemed to make sense to incorporate in DE, then register and do business in NY (the current corp would be dissolved).   I would be living in NJ, of course - but I can`t figure out why the business would need to pay taxes there during that time.  

 

Does any of this indicate "nexus" in NJ?   My accountant said that even though the corporation would be a Delaware Corporation, doing no business in NJ, I would need to pay NJ corporate taxes because that`s where I live.  (???)

 

- da