Ehrenberg, AZ · Member since 2018 · 1 post · 0 votes
I am an Arizona Resident starting an LLC. I will be doing the majority of my business in CA. What are the tax pitfalls and should I start my LLC in AZ or CA?
Attorney and CPA · San Diego, CA · Member since 2017 · 590 posts · 422 votes
8y
@Account Closed If you're doing business in CA, you will likely be subject to CA laws and CA taxes. The Franchise Tax Board (CA's state tax agency) takes a broad view of what constitutes "doing business" in CA. You also may have to file a CA nonresident income tax return and pay taxes on the income earned from CA sources (i.e. real estate located in the state of California). So you will not likely be able to escape CA taxes no matter what state you create your LLC in - maybe talk to your attorney about which offers better protection for you. Talk to your CPA about tax implications.
*This post does not create an attorney-client or CPA-client relationship. Readers are advised to seek professional advice.
Attorney and CPA · San Diego, CA · Member since 2017 · 590 posts · 422 votes
8y
@Account Closed If you're doing business in CA, you will likely be subject to CA laws and CA taxes. The Franchise Tax Board (CA's state tax agency) takes a broad view of what constitutes "doing business" in CA. You also may have to file a CA nonresident income tax return and pay taxes on the income earned from CA sources (i.e. real estate located in the state of California). So you will not likely be able to escape CA taxes no matter what state you create your LLC in - maybe talk to your attorney about which offers better protection for you. Talk to your CPA about tax implications.
*This post does not create an attorney-client or CPA-client relationship. Readers are advised to seek professional advice.
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
8y
@Account Closed Typically, it makes the most sense to open your LLC in the state that you do business. Otherwise you get to pay extra fees and such.
Also, there are countless threads here on BP about LLCs, which states to open them in, etc. I know it's easier to start your own thread, but I highly suggest you first go dig around the forums and read old threads.