Your state taxes will be done in the headquarters of the company then. That seems to be Tennessee. So the corporation needs to file any required forms in Tennessee and make certain that it is registered in Tennessee. Since you are a service based business that's all that is required.
If you convert your contractor in Pennsylvania to an employee you'll need to with hold state taxes for them as well as federal. You can handle payroll yourself with a service like Quickbooks since you'll only have the three employees.
@Halfwinter
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