If you are creating a new business in Florida or expanding an existing one, you have many issues and laws to deal with. The number of things that you must be aware of and make decisions about can be multiplied when your business operates in multiple states. Among the topics that multistate corporations must contend with is the payment of taxes.
The Journal of Accountancy explains that multistate companies need to be aware of how individual states handle income and taxes. Despite the existence of some federal laws, there are a myriad of situations in which laws and practices vary from state to state. This is seen even when it comes to setting up an S corporation. Three states require a separate entity filing in addition to the federal Form 2553 in order to do this.
Taxes for multistate S corporations are handled in many ways. In some states, there is no corporate income tax at all. In other states, taxation on S corporations is treated the same as for C corporations. Louisiana does this but with its own twist of excluding income on which shareholders have paid taxes. Still other states view the S corporation as a flow-through entity. It is vital that these issues be addressed before you make the decision to engage in business in a particular state.
If you want to learn more about some of the issues to be aware of and the decisions to be made when setting up a new business, you can visit our Florida business law website.