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opening up a business other then the state I reside

by mtecen, Window Shopper

  • Created: January 22, 2011, 7:47 pm
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3 comments

I'm a resident of MN but live most of the time in ND and would like to open up a small online business in ND since thats where I will be most of the time.  I want to start extremely small and just try and make a little extra money on the side.  I'm thinking about a sole proprietorship.  The only thing I'll be doing in ND is receiving and shipping products.

 

Basically I'm wondering three things:

If I should just open up the online business with the address in which I reside which would be MN?

             or

If I should just get residency in ND and open up the business then?

             or

If I can keep MN residency and open up an online business in ND and what would be the disadvantages if I did that?

 

Any help you can give me would be greatly appreciated

 

Thanks!

Tags: Discuss Popular Topics, Self Employed & Home Based Business
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BusPlanMaster | Window Shopper | 1/14/2010 - 12:40 am

The decision about where to locate your business may be out of your hands. States have a funny way of making that decision themselves, no matter what you prefer. To avoid taxation from both states, do take a firm stand on being located in one state, both YOU and YOUR BUSINESS, especially if you are filing taxes on a Schedule C. Check with the Dept. of Taxation (or whatever the department is called) of each state, and determine which one has more favorable tax laws, both for you and for your business. Then formally establish yourself there, get your DBA filing there (or your corporation if you prefer), list your website as being based there, get a phone there, put that address on your website. In short, do nothing that will allow the other state to have a claim on you or your business for taxes. Other than that, it doesn't matter where an internet business is based. I've taken my laptop from coast to coast and kept the business intact. MaryAnnBusiness Plan MasterStart and Finance Your Business Now ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Professional Web Site: http://www.BusinessPlanMaster.com

liquidgraph | Window Shopper | 1/13/2010 - 4:23 pm

I'm going with your home state when registring a business other than for one potentially huge perk: taxes. Consider which state has the best tax rate and go with them. Here in Texas, for example, we have ZERO state income taxe, which is great for starting a business.
Professional Web Site: http://www.freeannuityrates.com

ChristineL | Former Moderator | 1/11/2010 - 11:38 am

Hi mtecen, As a US resident, you can open a business in any state of the US. So if you prefer to start your business in ND, please look into our North Dakota Small Business Guide, which has information about starting, operating, licenses, permits, taxes etc. for your state. I am assuming that you will be running the online business out of your home? In that case, I suggest you take a look at our Home Based Business Guide and Online Business Guide. Before you decide to go with a sole proprietorship, make sure you understand the differences between business incorporations. Read more about it in our blogs: Differences in Legal Structures – Which Structure is Right for You? Should My Company be an LLC, an S-Corp or Both? Message Edited by ChristineL on 01-11-2010 11:40 AM