Hello and thank you for your question.
Unless your LLC is engaged in business in Delaware (for example,
selling goods or providing services to its customers from within the
state) it will not have to file any Delaware income tax return.
Delaware Partnership Return Instructions
http://www.state.de.us/revenue/taxforms/01/02form300i.pdf
Delaware Partnership Return
http://www.state.de.us/revenue/taxforms/00/form300.pdf
So the only filings you will need to make with Delaware will be
related to maintaining your LLC's legal existence. When you set up
your LLC, you were required to provide a local agent for it (so that
if someone wants to bring a lawsuit against your LLC there is a person
within the state whom they can serve their papers on). You can expect
to receive an annual bill from that person, and if you pay it they
will do what is necessary to maintain your LLC's legal existence. For
your info, here are the applicable forms:
Document Filings--Limited Liability Company
http://www.state.de.us/corp/corpfee3.htm#LLC
The other US states follow a similar scheme. If your LLC does
business (as defined above) in other US states, it will be required to
file income tax returns in those states and possibly to pay tax to
those states based on the state-by-state sources of its income. It
may also have to register with those states as an out-of-state entity
that is doing business within each such state.
Although you did not ask, I want to make sure you are aware that
because your LLC is a legal entity entity in the United States, it is
also subject to the tax laws of the US 'federal' government. If you
have not already done so, you should obtain a federal taxpayer
identification number for the entity.
Form SS-4
http://www.irs.gov/pub/irs-fill/fss4.pdf
Because you own 100% of the LLC, it will be taxed by the federal
government as a sole proprietorship. This means that as a foreign
person, you will file Form 1040NR and you will pay tax to the IRS
based on the business income if any that your LLC earns in the US
Frequently Asked Tax Questions And Answers
http://www.irs.gov/faqs/display/0,,i1%3D54%26genericId%3D15672,00.html
Form 1040NR
http://www.irs.gov/pub/irs-fill/f1040nr.pdf
Search terms used:
Delaware franchise tax
Delaware limited liability company
IRS Forms
I hope you find this information useful. If any of it requires
clarification, please let me know.
Regards,
richard-ga |
Clarification of Answer by
richard-ga
on
10 Aug 2002 12:58 PDT
Hello again:
You are asking if merely using an order fulfillment company /
warehousing company in a given US state will obligate you to file
income tax returns in that
state. This is really worthy of a separate question (and fee!) but I
will provide a brief answer here.
Please note that income tax laws of the 50 states are not all alike.
The law of the state in which the warehousing and order fulfillment
takes place is the one you need to consider--the fact that your LLC is
organized in Delaware will have no effect on the answer.
The question is also complicated by the fact that some state laws in
this area tend to overreach. That is, it is not unusual for a state
law to say you must pay a tax on certain conduct but thanks to the
Commerce Clause of the US Constitution their claim for tax is
unenenforceable.
Here's what the Maryland Comptroller has to say about this in the
context of corporate income tax (in your case it would be personal
income tax, but the argument is the same)--Clause 'E' addresses the
warehouse issue and says you do have to pay the tax:
"Trivial or de minimis activity does not establish nexus. The
following is a non-exclusive list of some instate activities which
generally create nexus and are outside the protection of [the law]:
A. Maintaining a business location in Maryland, including any kind of
office.
B.Ownership or use of property in Maryland, real or personal, whether
the property is:
1.Rented office space; or
2.Equipment used in the manufacture and distribution of goods.
C.Employees soliciting and accepting orders in Maryland.
D.Installation or assembly of the corporation's product.
E.Maintaining a stock of inventory in a public warehouse or placement
of the corporation's inventory in the hands of a distributor or other
non-employee representative.
F.Sales persons making collections on regular or delinquent accounts.
G.Technical assistance and training with Maryland offered by corporate
personnel to purchasers or users of corporate products after the sale.
H.Corporate personnel repairing or replacing faulty or damaged goods.
I.Mobile stores in Maryland (such as trucks with driver-salesmen) from
which direct sales are made."
Administrative Release No. 2
http://www.marylandtaxes.com/publications/bulletins/it/ar_it2.asp
You'll note that according to Maryland, you owe the tax even though
you use a "public warehouse" i.e. it's not a warehouse that you own
yourself.
To get a further idea of how complicated your question really is,
here's a company that makes its living advising other companies what
they can and cannot do in a state so as to avoid crossing the line
into taxability. The page cited below gives a good overview of the
'nexus' issue which is the crux of your question.
RSM McGladrey, Inc.
http://www.rsmmcgladrey.com/Services/Detail/salt_multistate.html
Search terms used in researching this clarification:
warehouse "doing business" "state tax"
I hope you'll agree that this is as much as I can fairly offer as a
'clarification' of your original question.
Good luck with your new business!
richard-ga
|
,
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