If a company is incorporated in Delaware, but has a bank account in NY in which state should this company report taxes? Could it cause do…

Answer by Wray Rives:

You will have to file taxes in Delaware, because at a minimum DE franchise tax will be due.  Just having a bank account in NY would not be a problem, but if the owner(s) are physically located in NY and working from NY, then the company will have to register and pay tax in NY also.  Any other state where the business and/or its owners/employees/officers are physically located and operating will require registration of the DE entity and will require a tax return in that/those states.
Although there are frequently similarities, every state has their own rules about what constitutes nexus (physical connection subjecting you to taxation). You probably need to consider every state where the company has owners, assets, employees or even a large number of customers as a potential state where you need to be registered. Have a conversation with an attorney or tax professional if you are not sure.
You are going to pay franchise tax in each state where the company is required to be registered.  DE has relatively high franchise taxes that max out at $180K per year, but realistically are typically more in the $400 range for your average small company. As a general rule franchise tax will not be a significant amount for most states.
Income tax for the most part should not result in double taxation as each state will have some factor to apportion taxable income among all the states where the company has nexus.

If a company is incorporated in Delaware, but has a bank account in NY in which state should this company report taxes? Could it cause do…