Does Your Business Provide Services or Intangibles ? Watch Out for State Taxes!
For businesses providing services or intangibles, many states have moved to market-based sourcing where states will tax you on where your market is (i.e. where customer is located) rather than where the work is performed. This means a state can tax you even if your business has no office or employees in that state and all work was performed outside that state.
A majority of states now have adopted market-based sourcing. Hawaii, Indiana and Vermont passed new market-based sourcing laws this year.
Note: California is a market-based state as well.