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If you have competent accountants/payroll, this is no more complicated than anything else. There might be a learning curve to get things set up properly, but th
by withinboredom 3y ago
If you have competent accountants/payroll, this is no more complicated than anything else. There might be a learning curve to get things set up properly, but the rest is reasonably normal.
- criddell 3y agoIt can be quite complicated. > State corporate or other business activity taxes can apply, if even a single employee is working in a state. In effect, if an employer did not previously have a recognized office in a state, but one employee starts working from there, this can trigger entirely new registration requirements and tax liabilities. It may be necessary to register with the secretary of state and relevant tax authorities, provide a registered agent address, and pay corporate and business activity taxes, sales taxes and employment taxes, including employee withholding. There are often state and local licenses and business permits as well. https://www.adp.com/spark/articles/2022/06/implications-of-work-from-anywhere-when-remote-workers-cross-state-lines.aspx https://www.adp.com/spark/articles/2022/06/implications-of-w...
- withinboredom 3y agoSounds like business as usual for most accountants that do SMBs. Worse case scenario you do this 50 times. The same thing happens in the EU when an employee works in another country, only worse. Sounds like you’ve got it pretty easy compared to there.
- criddell 3y agoI think you underestimate just how small most businesses are. In the US, something like 90% of businesses have fewer than 25 employees. Dealing with setting up in another state is a significant burden.
- withinboredom 3y agoI don’t think you understand how this works. At some point, you will surpass the sales tax threshold[1] for most states. Then you’ll be reporting and filing taxes in that state anyway. Adding an employee in a state is not complicated by that point. So sure, if you’re a company doing only local sales. Or a company doing less than 3-400k of revenue a year, this is probably complicated. Once you hit ~1m in revenue, there is probably AT LEAST one other state you are paying taxes to. Adding states should already be a defined process (or being defined) and an employee moving there is only a one or two lines different. 1: https://salestax247.com/sales-tax-thresholds-by-state https://salestax247.com/sales-tax-thresholds-by-state
- lotsofpulp 3y agoIn the premise Consultant32452 provided, the employees had already moved and been working from different states, so presumably all of that would already have had to be done.
- criddell 3y agoA lot of states made changes during the pandemic to allow remote workers. Those have all been ending over the past year and I assumed that’s what they were talking about.
- lotsofpulp 3y agoWhat? I do not see how any state could not allow remote workers. And all states have long required employers to register with the state government for tax purposes if they employ someone working in the state, as well as comply with the state’s labor laws.
- criddell 3y agoI didn’t say that right. What I meant to say was that a lot of states allowed remote workers to live there without having to pay local taxes.