State income tax property in non income tax state LLC

3 Replies

I currently have an LLC in TN. The 2 properties currently in this LLC are both in TN. TN has no state income tax. I was considering adding a property that is in Georgia into this LLC. Georgia has a state income tax. I have found conflicting info, that doing this could cause me to have to pay state income taxes on the entire LLC income. Are there any other negatives that I might not be considering? Can someone clarify this for me? If this is the case I will not be adding this property into this LLC. Thanks in advance.

I've got a similar situation (live in WA, buying property in GA).  I'm also not completely clear on out of state tax implications.

@John Parshall @Steve French

Doing business across multiple states within 1 entity requires you to apportion the income among the states. Each state has different rules on apportionment. Apportionment factors factor in Sales(rental income), Property(Building & land) and Payroll.

John in your case - You will need to research how Georgia requires you to apportion the income. Georgia shouldn't tax 100% of the income.

John - one thing you may want to look into is that even though Tennessee does not have a state income tax - they do have a franchise/gross receipts tax that you may be subject to.

One other thing to factor in is that your LLC will need to register with the Secretary of State as a foreign LLC in the new state that you do business in.

I recommend that you set up a Georgia LLC for your Georgia property. That will make it easier for you to track your income and expenses.

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