Complex U.S. State Taxes, Simplified
Federal tax is just the beginning. 50 states mean 50 different rules for income tax, sales tax, and business nexus. Use this interactive guide to find the optimal tax strategy for your situation.
Interactive State Tax Map
Click on a state to view its key tax information.
Personal Tax Planning: The Importance of Domicile
Which state taxes you is determined by your 'domicile'—your true home. Before leaving a high-tax state, leaving a clear trail to a new one is the best tax-saving strategy.
Domicile Change Checklist
When moving to a new state, the more of these actions you take, the clearer your 'intent' becomes.
Use the checklist to assess the strength of your move.
Key Concepts: "Sticky States" & "Convenience Rule"
Sticky States
High-tax states like California and New York don't easily let go of their tax base. When leaving these states, you must provide clear and convincing evidence of your move, or they may continue to claim tax on your income even after you become a non-resident.
Convenience of the Employer Rule
Applied in states like New York and Pennsylvania, this rule states that if your company is in NY, but you work remotely from Florida for your own convenience, your income may still be considered NY-sourced and subject to NY income tax, risking double taxation.
Business Tax Planning: The Nexus Maze
Do you sell online to other states? The moment your business establishes 'Nexus' (a tax connection) with a state, you're obligated to collect and remit that state's sales or income tax.
Sales Tax 'Economic Nexus' Checker
The most important standard for online sellers. Select a state to check its sales tax filing threshold.
Income Tax Nexus: Public Law 86-272
This federal law protects businesses from a state's income tax under specific conditions.
- Who's Protected: Businesses that sell 'tangible personal property' (i.e., physical goods) into another state.
- The Condition: In-state activities must be limited to the 'solicitation' of orders. Order approval, shipping, and billing must occur outside the state.
- Losing Protection: If you perform activities beyond solicitation, like repairs, installation, training, or handling complaints in-state, you lose the law's protection and may owe income tax.
Key State Tax Comparison
See how your choice of residence can visually impact your wallet.