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Where is your buisness 'tax home'

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in Small Business Tax

Q I’m starting an Internet-based business with my  brother. Since our state of incorporation can be virtually  anywhere, should we incorporate in Delaware as  our home state for income tax purposes? D.J., Boulder,  Colo. 

A No. Large companies often incorporate in Delaware for  legal reasons, but that has no impact on federal income  taxation. Talk to a business attorney and a tax pro to see if  it’s necessary for your situation. Tip: Regardless of your  home state, you may face state sales tax liability if you  have customers or engage in activities in other states.

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