Sales Factor for mulitstate Telecommunication company

[jmc]

I have a client in Telecommunication business which buys minutes from major telephone carriers, then resells to callers in multi-states.

* No Telecommunication Property/plant facility, but utilize the equipment of the major telephone carriers
* Rent payment - only from California location
* No Payroll in other states, but in California
* Telemarketing - by outsourcing from India
* Customer service for billing disputes - only in California
* Technical support & repairs - by major telephone carriers
* Billing - by a billing company located in Texas

1) How do states other than California interpret Sales Factors in this case for Telecommunication company?

2) Do they consider that there are nexus in those states, since it has Income from in-state Business or Sources?

3) Also, does anyone know or have a website which lists all-state Department of Revenue email addresses?

[ChEAr$]

questions

is this a sales tax question?

As for income tax, depends on form of business.

[jmc]

S Corporation income tax

It is for S Corporation income tax.

[Snaggletoof]

No Exact Answer

No exact answer to this, but try to do some reading on "Source" sales and "Destination" sales. Each state uses sales in their allocation formula, and are circumstance dependent. A company who ships via 3rd party carrier to customers in 49 other states can safely claim the "Source" sales formula, and allocate all their sales to their home state. A contracting company, however, who staffs a payroll in 8 different states where their staffs live, should be considered "Destination" sales, and will have to allocate to the 8 states, plus their own state if not one of the 8.

The above are reasonably easy to define, but that doesn't answer how a telecommunications company should allocate. Remember, asking the states won't result in an unbiased answer since all the states would love to claim a piece of everyone's income.