State Tax Filing · United StatesYour state filings follow where you do business, not only where you formed the company.
We work out which states can tax your business, separate the tax returns from the annual reports, and file both on time.
Tax
At a glance
- Authorities
- State departments of revenue and taxation · Secretaries of State · Delaware Division of Corporations · California Franchise Tax Board (FTB) · Texas Comptroller of Public Accounts
- Forms & references
- Delaware Annual Franchise Tax ReportCalifornia Form 100California Form 568California Form 3522Texas Form 05-102 (Public Information Report)
- Filed with
- State revenue departments and Secretaries of State
- Delaware
- Corporations file the franchise tax report by March 1; LLCs pay a flat $300 tax by June 1
- California
- $800 minimum franchise tax or annual LLC tax, owed even with no income (at the time of writing)
- Texas
- No franchise tax due at or below $2.65 million revenue for 2026 reports, but an information report is still required
Overview
What it is, and why it matters.
Every state sets its own rules. A company formed in Delaware or Wyoming that has staff, property or customers elsewhere can owe tax in those other states too. The test is nexus: enough connection with a state for it to require a return. Physical presence creates nexus, and many states also apply economic tests based on sales into the state.
Two filings are often confused. An annual report (in some states a statement of information) is usually filed with the Secretary of State and keeps the entity in good standing. A tax return is filed with the state revenue department and reports income, receipts or capital. They are separate obligations with separate deadlines, and missing either can cost you good standing.
No personal income tax does not mean no business tax. Texas, Florida, Nevada, Wyoming and South Dakota have no personal income tax, yet Texas charges a franchise tax, Florida taxes C corporations, and Nevada has a commerce tax for businesses with larger gross revenue.
Partnerships and S corporations add another layer. Many states require them to withhold tax for owners who live in other states or abroad, or allow a composite return on those owners’ behalf.
Who needs it
Who typically needs it.
- 01
Delaware and Wyoming companies run from elsewhere
Founders who formed in one state but operate from California, New York or abroad, and are unsure what each state expects.
- 02
Businesses with remote employees
Companies with staff working from home in several states, which can create income tax nexus as well as payroll registrations.
- 03
Partnerships and S corporations with out-of-state owners
Pass-through entities that must handle nonresident withholding, composite returns or pass-through entity tax elections.
- 04
Growing online and service businesses
Companies whose sales into other states are approaching economic nexus thresholds for income or franchise tax.
- 05
Entities that have lost good standing
Companies suspended or forfeited for missed reports or taxes that need to catch up and reinstate.
When you need it
The moments that usually trigger it.
- Your Delaware franchise tax notice shows a figure in the tens of thousands, and you suspect it was calculated the expensive way.
- You’ve hired your first employee in a state other than the one you formed in.
- A state tax department has written to ask whether you do business there.
- Your company has been suspended by the California Franchise Tax Board or forfeited by the Texas Comptroller.
- Your partnership or S corporation has an owner who lives in another state or outside the US.
- You’re closing or moving a company and need final state returns and a clean exit from each state.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
A nexus review listing the states where your activities create an income, franchise or gross receipts tax filing obligation.
- 02
Preparing and filing state income and franchise tax returns, such as California Forms 100 and 568 and New York Form CT-3.
- 03
Delaware annual franchise tax reports, including recalculating the tax under the assumed par value capital method when it produces a lower bill.
- 04
Texas franchise tax reports and Public Information or Ownership Information Reports.
- 05
Tracking and filing annual reports and statements of information with Secretaries of State.
- 06
Nonresident withholding, composite returns and pass-through entity tax (PTET) elections for partnerships and S corporations.
- 07
State estimated tax payments and extension filings.
- 08
Responding to state notices and helping reinstate suspended or forfeited entities.
The process
How it runs, step by step.
Timings depend on the authority and on how quickly documents come together. We tell you what’s typical for your case at the start.
Start with a conversationMap your footprint
We list where you are formed and registered, where you have employees, property or customers, and which states your owners live in.
Confirm obligations
For each state, we separate tax returns from annual reports and note deadlines, minimum taxes and any registration still missing.
Apportion the figures
Using your federal return and books, we apportion income or receipts to each state under that state’s formula.
Prepare and file
We prepare the returns and reports, review them with you, file them and schedule the payments.
Keep the calendar
Every state deadline goes into one calendar alongside your federal dates.
What we’ll need
The information to have ready.
A typical checklist. After the first conversation we send a version specific to your situation, so you don’t gather anything you don’t need.
Entity details
- State of formation and any registrations to do business in other states
- State tax account numbers and online portal access
- For Delaware corporations: authorized shares, issued shares and total gross assets
Activity by state
- Where employees work
- Office, warehouse or inventory locations
- Sales by customer state
Owners
- Each owner’s state or country of residence
- Ownership percentages
Prior filings
- Last year’s state returns and annual reports
- Any state notices, suspension or forfeiture letters
Please don’t email passports or bank statements. Once we’ve spoken, you’ll get access to a secure upload.
Common mistakes
Where this usually goes wrong.
The problems we are most often asked to fix, and what they tend to cost.
- Mistake 01
Paying Delaware’s default franchise tax without checking
Delaware’s authorized shares method can produce a very large bill for a startup with millions of authorized shares. Recalculating under the assumed par value capital method, based on gross assets and issued shares, can reduce it substantially.
- Mistake 02
Confusing the annual report with the tax return
Filing a Secretary of State annual report does not satisfy a state’s tax return requirement, or the other way round. Missing either can lead to penalties and loss of good standing.
- Mistake 03
Forgetting California’s minimum tax
An LLC formed, registered or doing business in California owes the $800 annual tax each year, even with no income. Unpaid amounts lead to penalties and eventually suspension by the Franchise Tax Board.
- Mistake 04
Ignoring nonresident owners
A partnership or S corporation that should have withheld state tax for out-of-state or foreign owners can be held liable for that tax itself.
Worth knowing
The limits, stated upfront.
State rules, rates and thresholds differ widely and change often. We confirm the current position for each state when we scope your work.
City and county taxes (local income, gross receipts or business license taxes) are included only where agreed at scoping.
Reinstatement timing depends on each state’s processing and may need clearances from more than one agency.
Contested nexus positions, audits that move to litigation, and questions needing a legal opinion may require a state tax attorney.
Questions
State Tax Filing: frequently asked.
If yours isn’t here, ask us directly. We’ll answer in plain terms.
Ask a questionDo I pay state tax where I formed my company or where I operate?
Potentially both. The state of formation usually charges an annual fee, report or franchise tax, and any state where you have nexus can require income or franchise tax returns. A Delaware company run from California, for example, generally owes California tax as well.
What is the difference between an annual report and a state tax return?
An annual report updates the state’s record of your company, such as officers, address and registered agent, and is usually filed with the Secretary of State. A tax return reports income or receipts to the state revenue department. Some states combine the two; Delaware’s corporate annual report is filed together with the franchise tax.
Why is my Delaware franchise tax bill so high?
Delaware’s default calculation, the authorized shares method, can produce a large figure for a company with millions of authorized shares. The assumed par value capital method, based on gross assets and issued shares, often produces a much lower amount, and you can file using it. At the time of writing, the minimum under the authorized shares method is $175, plus a $50 annual report fee.
Does California really charge $800 if my LLC made nothing?
Generally, yes. At the time of writing, an LLC formed, registered or doing business in California owes the $800 annual tax to the Franchise Tax Board each year regardless of income, and the temporary first-year exemption for LLCs formed in 2021 to 2023 has ended. LLCs with California gross receipts of $250,000 or more also pay a separate LLC fee.
We are under the Texas no-tax-due threshold. Do we still file?
Yes, but less. For 2026 reports, entities with annualized total revenue at or below $2.65 million owe no franchise tax and no longer file a No Tax Due Report, but they must still file a Public Information Report or Ownership Information Report, generally by May 15. Missing it can lead to penalties and forfeiture of the right to do business in Texas.
What is a composite return?
A composite return is a single state return a partnership or S corporation files on behalf of its nonresident owners, paying their state tax so they do not each have to file there. Whether it is available, required or replaced by withholding varies by state.
Which states have no income tax?
Several states, including Texas, Florida, Nevada, Wyoming and South Dakota, have no personal income tax. Some of them still tax businesses through franchise, gross receipts or corporate income taxes, so the answer depends on your entity type and activity.
Related
Often needed alongside this.
The equivalent in our other countries
Speak with a consultant
Talk to us about state Tax Filing.
Pick the closest match and we’ll take it from there. You’ll get a written scope and fee before any work begins.
Or use our three-step guide, or email hello@fiscorra.com
