In this article, we have included some legal cases that set the precedent for current multi-state sales tax laws. Included among them is the historic Wayfair case that broke ground in the area of e-Commerce.
Hopefully, this background will put some of the present law into context. But as always, as the business climate continues to shift and change, so will the laws associated with multi-state taxation.
If you haven’t had to pay any state taxes for the past few years but now face a liability, you might be wondering, why do I owe state taxes this year? It’s a pretty common question that many taxpayers struggle to find the answer to.
You may not even be aware that you owe state taxes this year. It all depends on how your income has changed over the previous year and whether you still have any credits or deductions available to you that were used previously to reduce your taxes.
Companies that have employees working in other states must pay close attention to each state’s payroll tax regulations. In many cases, payroll tax will be owed to California and to the other states where your employees are working.
Payroll taxes are determined on the proportion of income that is generated per state and must be paid to each state.
Robert Wood, tax expert and frequent contributor to Forbes.com, wrote that “many would-be former Californians have unrealistic expectations about establishing residency in a new state. They may have a hard time distancing themselves from California, and they may not plan on California tax authorities pursuing them.”