Which of three states do I pay taxes too?

[AndPhoton]

I am self-employed (a photographer) in Tennessee. I photographed a project in Alabama for a company based in New York (which is where the 1099 is addressed from). Since it is photography, it is was not sold as a physical product, and I am filing taxes as a single-member LLC.

Do I need to file anything in either of those other states?

[TomK2023]

You should file a nonresident New York state tax return (note: bullet points 1  & 2 below).

If you are a New York State nonresident you must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, if you meet any of the following conditions:

• You are a nonresident with New York source income and your New York adjusted gross income Federal amount column (Form IT-203, line 31) exceeds your New York standard deduction.
• You want to claim a refund of any New York State, New York City, or Yonkers income taxes withheld from your pay.
• You want to claim any of the refundable or carryover credits available.
• You had a net operating loss for New York State personal income tax purposes for the tax year, without having a similar net operating loss for federal income tax purposes.

You may have additional filing responsibilities if you have Yonkers income, or are subject to the MCTMT.

New York State Department of Finance and Taxation - Filing information for New York State nonresiden...

[AndPhoton]

@TomK2023  So do I need to file a tax return in every single state in which I have a client? Even though the work is usually performed in Tennessee, and is a digital product?

[TomD8]

As far as I know, the only state that taxes non-resident independent contractors is California.  CA taxes non-resident independent contractors on services provided to CA-based clients, even if the work is not performed in California.

With regard to other states, the general rule is that you are taxed based on the location where you actually (physically) perform the work, regardless of the payor's location.

I think the correct answer to your original question is that the income you earned from work you did in Alabama would be subject to taxation by Alabama, not by New York.  New York does not tax non-residents who never physically work in New York.

[PatriciaV · Accepted solution]

It depends where you performed the work. The rule for most states is where the income was sourced, or in your case, where you "created" the finished product (not necessarily where you took the photos or to whom they were sold).