Today TaxMama hears from Fred in Illinois who wants to know. “I’m thinking about opening a mortgage adjusting business. My clients might be from another state. What do I do about a local business license?”
That’s a very good question.
In some instances, when you work from your home state by phone, mail, fax or the Internet, you don’t need to worry about local licenses. As long as you don’t have a physical presence in the other state, you would be fine.
However, when it comes to dealing with mortgages, insurance and real estate, you may be subject to state laws governing those professions.
Visit the websites of the various states where you expect to be finding clients. Learn the rules. Or call the Secretary of State’s office in each state for more guidance.
There is a site that may be able to do the research for you – BusinessLicenses.com – you should be able to get a discount using this link – http://snurl.com/license-tax .
Incidentally, if you must get a business license, you may need to incorporate, or form an LLC and register it in each state. If so, you will need an agent of service. You can do all that here:
Call 800.2.INCORP – use coupon code – TAXMAMA – or http://go.asktaxmama.com/incorp (no code needed)
You will need to file income tax returns and/or sales tax returns, in each state to report the income generated. It will get complicated. Before doing anything else, please, get some professional advice and plan out your business, your costs, and your budget to see if it’s worthwhile operating across state lines. Why not just start in your state and as you grow, offer services in other states?
And remember, you can find answers to all kinds of questions about running a business across state lines and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
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- BusinessLicenses.com :: To help you with business licenses, locally or across state lines
- Incorp.com :: For your agent of service and setting up your corp or LLC