Owner Operator and State Income Taxes

I hope it's just the state of residence. Fuel taxes, surely, among others, per state.

 

Only in your home state

 

Yeah, income tax only in your home state, any other taxes you are still stuck with.

 

If you are a sole proprietorship, you pay state income taxes only in your home state (thanks to the Amtrak Act).

If you are incorporated, you still only need to file personal income taxes in your home state, but your corporation is supposed to pay income taxes in every state in which it has nexus. New Jersey, Pennsylvania, Michigan, Illinois, & California are among the states most aggressive in enforcement.

 

I don't know for sure, but I suspect if set up to be taxed as a sole prop you wouldn't have to worry about it.

"Nexus" is "a connection" -- which in the context of taxes means you have a sufficient connect to the state for them to tax you. Each state sets up its own threshold for creating nexus. If you pick up or deliver in New Jersey, for example, you've created Nexus there. If you merely drive through Illinois, you've created Nexus there.

 

LLC isn't actually a recognized organization by the IRS, all they see is how you choose to pay your tax. Since you elected to be taxed as a sole proprietor you will only have to pay in your home state. If you had elected to be taxed as an S corp you would pay in all of them.

 

Only your State of residence.