Out-Of-State Corporations

Dear Janet,

I have just formed an S corporation which provides conservation repair of books, documents, and paper artifacts. It is incorporated in Delaware but located in my home studio in Maryland. Will I need to charge my clients state sales tax for the services which I provide? (Many of my clients are non-profit museums and are not taxed, but how about the private clients?)
–Janice E

Dear Janice,

Since you have a physical presence in Maryland, you would need to charge Maryland residents sales tax on taxable sales.

Incidentally, what many people don’t realize when they incorporate their business out of state is that to do business legally in their own state, they also have to register in their own state as a “foreign” corporation. This usually entails filling out a form and paying a fee. Thus you pay two corporate fees – one to the state in which you’ve incorporated, and one to your own state. If you need information about registering as a foreign corporation in Maryland, you can get the information by calling 410-767-1180.


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