If I want to open an LLC (e-commerce) this year, which state(s) will I pay taxes in? I'm a military member stationed in Kansas, my home of record is Virginia.

I'm looking to open an e-commerce business this year under an LLC. I am currently stationed in Kansas, but I only pay Virginia income tax since that is my home of record. How will taxes look with this business? I'll likely be registering the LLC in Kansas, so I'll have to pay tax here. Will I have to pay Virginia tax on it as well? Will opening the business affect the way my current income is taxed, or will my military income still only be taxed by Virginia? Any insight is greatly appreciated, thanks in advance.

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Expert Alumni

Mar 20, 2021 2:01:36 PM

You may have to file a nonresident Kansas tax return to report the LLC income (if you are required by Kansas). You would also report the LLC income on your Virginia return, but because it is your resident state, you will get a credit for any tax you pay to Kansas so you will not be taxed on the same income twice at the state level. You active duty pay will still be "as if" you earned it in Virginia so you would not be taxed on it on the Kansas state return.

Good luck with your business!

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If I want to open an LLC (e-commerce) this year, which state(s) will I pay taxes in? I'm a military member stationed in Kansas, my home of record is Virginia.