You will pay tax in GA as you are residents and GA taxes 100% of residents income. You will also pay California tax as a nonresident on income that is earned from California as well as the LLC fee which is $800 plus a progessive fee based upon the entity's apportioned gross receipts to California.
answered 06 Apr '11, 16:42
I think that depends on what you mean by "planning to do business in CA with a CA resident". We'd need to know what that means before we can tell you anything definitive.
Brent is on point saying that as GA residents you'll pay to tax to GA on your total income, no matter where you earn it.
The CA issue isn't so clear to me from what you posted. For example, if you idea of doing business in CA is buying widgets from a CA supplies so you can sell them at craft shows in GA you'd have no CA income or filing requirement. On the other hand if you hop a plane to Sacramento and provide services IN the state of CA then you will have a CA tax issue.
And, as Brent as pointed out, if you register your LLC in CA (which is required IF you're going to conduct business IN California) then CA does have an $800 annual minimum fee that accompanies the return.
I have not done a GA return is some time so I cannot tell you off the top of my head, but most states allow you a credit for some part of the tax you have to pay to a nonresident state on income which is also taxed by your resident state. Many times this results in no double taxation (paying tax on the same income to multiple jurisdictions), but sometimes it does. Maryland, for instance, allows you are credit for the LESSER of the tax paid to the other state OR the tax you would have paid to Maryland had you earned the money. In cases like this it IS possible to pay tax on the same money twice.
answered 07 Apr '11, 21:37