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Where is your business '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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