Hired an employee who lives in South Carolina but Works in North Carolina. But the company doesn't have a physical location in North Carolina.

[jasshuang]

We recently hired an employee who lived in South Carolina but going to work as a "remote sales" in North Carolina. What she does is basically visit clients in North Carolina so she'll always be on the road.

Our company is registered in other states(IL and GA) but not in SC or NC. And we don't have a physical location in either SC or NC. How do we withhold the employee's state income taxes? Do we need to register our company in North Carolina?

Thanks.

[KristinaK · Accepted solution]

Since your company has an employee in SC, that would be considered as doing business in the state. So you would need to obtain a certificate of authority in SC (register with the Secretary of State) and file SC tax returns. Of course, the company would also need to register with the SC Department of Revenue for withholdings; and with the SC Department of Employment and Workforce for unemployment payments. 

With North Carolina, it's a bit trickier. Here, under (a)(4) it seems to indicate that you would need to register with NC as well. This is more in the realm of a tax attorney rather than a tax pro, so you might want to either contact one or contact the NC Department of Revenue to clarify their position.