I am a partner in an LLC. I live in the same state that my LLC is registered in. A tax preparer for another of my partners is telling us that we all have to file state tax returns in every state where we had sales. I've never heard of this and have never done it. Is this true?
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Not necessarily.
What is key is determining if your business (LLC) has nexus in the states where you have sales.
This question, and a proper response, is beyond the scope of this forum.
There are a number of factors that go into whether the LLC has nexus in other states, and for someone only looking at a partner's 1040 (K-1) most likely does not have sufficient details to make that determination.
You need to consult with the person that prepares the LLC tax return to get better information.
And that would only be the first step. Your K-1 activity may be below the threshold of having to file in a particular state.
My recommendation is to first discuss with the preparer of the LLC return.
ask the preparer why they believe the business has nexus in each state in which you had sales.
just making sales from the state your business is in to another state does not constitute nexus.
was a partnership return filed for each state in which you made sales and has a personal or even partnership/LLC income tax? that would likely be incorrect unless there is nexus in that state.
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