Tax Filers in Phoenix Who Operate Across Borders Face Unique Challenges

Common Issues and Important Considerations for Those Doing Business Across State Lines or in Other Countries

Nexus Rules

In the United States, states have their own "nexus" rules, which are the criteria for determining if a company is doing sufficient business in a state to be subject to its taxes. This could be as simple as having a physical presence, but may also include factors like sales revenue, payroll or even the number of transactions in a state. We can help you understand these rules and determine where you have a tax obligation.

Multiple Tax Jurisdictions

Businesses operating across multiple states or countries must comply with the tax laws of each jurisdiction. This means understanding and keeping up to date with the tax laws in each location, which can be complex and time-consuming.

Sales Tax Collection

If you're selling goods or certain services, you may need to collect sales tax. The rules for this can vary greatly between jurisdictions, both in terms of the sales tax rate and what qualifies as taxable. Some places tax products being shipped from the locality while others only tax products that are shipped to or sold within their borders. Each state and country is a little different, and it’s important to comply with the rules in every place in which you do business.

Income Allocation

Different states and countries have different rules for how income is allocated for tax purposes. You'll need to understand these rules and apply them correctly.

Double Taxation

Without careful planning, you could end up being taxed on the same income in multiple places. There are usually mechanisms to avoid this, like tax treaties between countries, but these can be complex to navigate.

Filing and Payment Requirements

Each jurisdiction will have its own rules for when and how tax returns must be filed and payments made. Keeping track of all these deadlines and requirements can be challenging.

Interstate and International Tax Treaties

Countries often have treaties with each other that affect how businesses are taxed. These treaties can provide tax credits or exemptions for certain types of income, which can significantly affect your tax liability.

Transfer Pricing

If your business operates in multiple countries and transactions occur between different parts of the business, you'll need to be aware of transfer pricing rules. These rules require that transactions between related entities be priced as if they were between unrelated entities, to prevent shifting income to lower-tax jurisdictions.