Georgia corporation

[oceanlovin'ea]

I have a client in Georgia that has an s corp. He has gotten a job in Florida that will last at least 6 months.
Most likely they will move to Florida in hopes that the work continues. They were originally from Florida so it is actually going home.

Can he still work under his Georgia corporation for a time? I realize that would mean that he would still have to pay Georgia state taxes probably. That might be a bummer since Florida doesn't have a state tax.

Just that moving the family with 4 small children down will be a big job. He will be down here working and she will be trying to do the moving, finding new home, etc.

I was telling her to set up Florida LLC before he starts to work so that the new job would fall under new company.

But I don't see why he can't work under his present corporation until he sets up new company. I'm sure contractors take jobs in other states and don't set up companies.

Thanks for the help.

Linda

[JohnH]

If he wants to keep everything legal & proper, he will probably need to register the GA corporation as a "foreign" corporation in FL and then allocate income on the state corp returns. In most states, this entails basically the same paperwork process as forming a new corporation, but at least it remains a single corp for Fed purposes, so there is only one reporting entity at that level.

[erchess]

Corp Setup

Corporations usually incorporate in the state where they will initially have HQ or do the most work but I don't believe any state actually requires that and sometimes there are valid reasons for doing otherwise. Delaware is particularly friendly to companies involved in lending money and Nevada has a reputation for being friendly to corps generally. As John pointed out, every state has a procedure to let a foreign company come in and legally work and pay its taxes.

The big concern to me would come when he is ready to be just a Florida entity. I believe that he will have to dissolve the Georgia Corp per GA law and if memory serves fairly promptly file short year returns (Fed GA and FL) and of course begin as a Florida LLC or whatever with again a short tax year. Course he might be able to avoid the hassles of short year by having the Ga Corp die on the last day of its tax year. The other concern of course is that if he works on a day when Ga is closed and FL is not yet in business then he has a Sch C business during the gap period.

[oceanlovin'ea]

gap

That gap is exactly what I am trying to help him avoid.

Ga corporation is a calendar year so it wouldn't die a natural death till end of year.

Can he start a Florida LLC before he closes the other?

Linda

[erchess]

New before closing old

That sounds like a good question to ask a tax attorney but I think the answer is yes he can. Then both entities would file Federal Returns and each would file one State Return. If it's legal (and I think it is) then you have probably hit the simplest solution.