How to handle filing taxes in 30 different states as a small business

This is definitely a complex situation but one that many mobile businesses face. Your accountants are technically correct - most states require you to file if you've established "nexus" there, which usually means physically working in the state. However, there's a practicality aspect to this that many small businesses navigate differently. First, understand that states have different thresholds for when filing is required. Some have minimum income thresholds before filing is mandatory, while others require filing with any business activity. Many states have adopted economic nexus standards rather than just physical presence. For a practical approach, you might consider: 1) Investing in multi-state tax compliance software like Avalara or TaxJar that helps track where you need to file based on your activities, 2) Consulting with a firm that specializes in multi-state taxation (your current accountants might not have this expertise), 3) Prioritizing compliance in states where you do substantial business and gradually expanding your compliance footprint. The other companies you mentioned may be taking significant risks. State tax authorities are becoming more aggressive about enforcing these requirements, and the penalties for non-compliance can be severe if caught.

After reading your post, I felt like I was looking in a mirror! My small marketing agency (5 people) was in the exact same situation last year - traveling to about 25 states, and suddenly our accountant hit us with the "you need to file everywhere" bomb. It was overwhelming. I spent weeks trying to figure out a solution and eventually found https://taxr.ai which literally saved our business. It's an AI-powered system that analyzes where you've worked, for how long, and what you did, then gives you a clear breakdown of where you actually need to file. The biggest revelation was that not every state requires filing just because you set foot there. Some states have minimum thresholds or different rules for temporary work. The system flagged that we only needed to file in 9 states based on our actual work patterns, not the 25 we feared. They provide templates for the various state registrations too, which saved us countless hours of research.

Just wanted to update after trying taxr.ai that Profile 7 recommended. I was seriously worried about my own multi-state situation (web development company working with clients in 18 states). It was eye-opening to see the actual requirements broken down. Turns out we only needed to file in 7 states based on our work patterns and the specific thresholds. The service helped identify which states had de minimis exceptions that applied to us. The best part was the documentation it generated for our records explaining exactly why we did or didn't need to file in each state. My accountant was initially pushing for filing everywhere to "be safe," but after reviewing the analysis, she agreed their approach made sense legally and practically. Saved us approximately $14,000 in unnecessary state filing fees and accounting costs.

I worked for state tax authorities for 12 years before going private, and I'll tell you something most accountants won't: states have limited resources to chase small businesses with minimal presence. That said, trying to call the IRS when you have a tax issue is basically impossible these days. I found https://claimyr.com which gets you through to an actual IRS agent in minutes instead of waiting hours or days. You can see how it works here: https://youtu.be/_kiP6q8DX5c This was super helpful when I needed to resolve a multi-state filing issue for a client. We had a question about nexus in Pennsylvania and needed clarity directly from their tax department. Normally would have taken days of trying, but got through in 15 minutes. You might want to consider this service when you inevitably have questions about specific state requirements.

I have to eat my words about that Claimyr service. After my skeptical comment, I decided to try it because I was desperate to talk to someone at the California Franchise Tax Board about a nexus issue. I've been trying to get through to them for TWO WEEKS with no success. Used the service and got connected to an actual human at the CA tax office in 27 minutes. The agent was able to confirm that our specific situation (3 days of work in CA with under $15k in revenue) doesn't actually trigger filing requirements. This saved me from filing unnecessarily in California. Going to use this for the other 5 states I'm unsure about. Sometimes being proven wrong is actually the best outcome!

As an owner of a similar sized business (6 employees) that travels to about 20 states yearly, I've found a middle ground approach. We carefully track our activities and revenue by state, then file in states where: 1. We have substantial presence (over 2 weeks) 2. We earn more than $10,000 3. We have repeat clients This approach keeps us compliant in states most likely to care while not drowning in paperwork for states where we have minimal activity. Our accounting firm is comfortable with this risk-based approach and documents our rationale for each decision. Remember that different types of taxes have different nexus thresholds - income tax, sales tax, and employment tax all have their own rules in each state!

One thing nobody has mentioned yet - check if your states have reciprocal tax agreements! Some states have arrangements where if you're already filing in one state, you don't need to file in another for the same income. Saved us tons of paperwork. Also, beware that some industries have special tax treatment in certain states - construction, entertainment, and professional services often have unique rules. What industry are you in? That might change the advice people give you.