Crossing all T's on multi-state LLC filings?

[Anonymous]

I realized this morning that I hadn't filed my annual report for a state we have a Nexus in for two+ years. Luckily, the state was understanding and we got caught up.

This is making me think to make sure I am not missing anything else. We are a Delaware LLC, taxed as an S-CORP, with a nexus (for payroll) in Massachusetts. If I could go back and do it again, I'd just file in Massachusetts only, but it is what it is for now.

For Delaware, I pay:

- Registered Agent fee

- Annual report ($300 fee)

For Massachusetts, I use my home address as the registered agent, but otherwise, I use/manage:

- Gusto (our payroll, handles Massachusetts filings, etc.)

- Unemployment Insurance login (plus taxes out of payroll)

- Paid & Medical Family Leave login (plus taxes out of payroll)

- Workers Comp login (taxes out of payroll, excludes owners)

- Mass Tax Connect (for online quarterly business taxes, handled by Gusto, our payroll provider)

- Annual report ($500 fee, registered as a Delaware LLC operating in Massachusetts)

Is there anything I might be missing on the state level that I might need to take care of ASAP? Our accountant handles everything with the IRS. Really appreciate any insight!

[Rick19744 · Accepted solution]

This forum is not really conducive to address that type of a question, but here are a few comments:

• Is your accountant not able to provide some advice in this area?
• If the response to bullet #1 is "no", then I would recommend a one on one with a tax professional where you can provide this individual with an overview of your business and future plans.  This initial overview will lead to possibly other questions and then provide you with guidance on state nexus.
• You will need to be able to address the following in this meeting:
  • Type of business activity
  • How sales are generated, who generates them, who approves them, where are the sales approved
  • Are you traveling into other states either for marketing or sales?
  • Do you have other employees or agents in other states?
  • What is your internet activity for purposes of generating sales?

These should get you going in the right direction.  It is good that you are attempting to address this issue after learning about nexus the hard way; which appears to have gone well.

A reason that this is extremely important is that the statute of limitations does not begin until you file a return.  So if you should have nexus in a state for 5, 6 years without filing a tax return, and get caught, you will owe tax for all those back years including potential penalties and interest.

The one time consultation will certainly pay dividends in the long run.