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Posted by philip_b_taylor on May 29, 2008, 10:18 am
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I run a small consulting business and have worked in many countries
and
several USA states. We are registered as a limited company in the UK
and
pay the required corporation tax on our worldwide earnings in the UK.
We are not registered as a corporation in any USA state or other
country
apart from the UK and have no employees, assets or offices outside the
UK.
Having done some consulting work in Hawaii, to my surprise, the State
of Hawaii wants us to file Corporation Income tax returns? Surely we
are not liable for this double taxation - we have never been asked for
this from any other country or US state.
Looking at the State of Hawaii corporation tax rules doesn't help much
- they depend
on your corporate status (eg LLC) - but we are a UK limited company.
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Posted by removeps-groups@yahoo.com on May 29, 2008, 2:33 pm
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On May 29, 7:18 am, philip_b_tay...@yahoo.co.uk wrote:
> I run a small consulting business and have worked in many countries
> and
> several USA states. We are registered as a limited company in the UK
> and
> pay the required corporation tax on our worldwide earnings in the UK.
> We are not registered as a corporation in any USA state or other
> country
> apart from the UK and have no employees, assets or offices outside the
> UK.
How did you do consulting business in Hawaii? Did you physically meet
with clients in Hawaii? Did you use your hotel room as office space
if necessary? Did you do everything over the internet?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Dick Adams on May 29, 2008, 11:24 pm
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>Having done some consulting work in Hawaii, to my surprise, the State
>of Hawaii wants us to file Corporation Income tax returns? Surely we
>are not liable for this double taxation - we have never been asked for
>this from any other country or US state.
If you earned the income while present in Hawaii, you may
be subject to their taxes. You need a Chartered Accountant
in the UK who specializes in foreign taxation to sort this
out for you unless Katie Jaques chimes in on this thread.
Wait until you do consulting work in California. They want
to tax you on anything and everything.
Dick
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Katie on July 4, 2008, 3:59 pm
Please log in for more thread options On May 29, 7:18 am, philip_b_tay...@yahoo.co.uk wrote:
> I run a small consulting business and have worked in many countries
> and
> several USA states. We are registered as a limited company in the UK
> and
> pay the required corporation tax on our worldwide earnings in the UK.
> We are not registered as a corporation in any USA state or other
> country
> apart from the UK and have no employees, assets or offices outside the
> UK.
>
> Having done some consulting work in Hawaii, to my surprise, the State
> of Hawaii wants us to file Corporation Income tax returns? Surely we
> are not liable for this double taxation - we have never been asked for
> this from any other country or US state.
>
> Looking at the State of Hawaii corporation tax rules doesn't help much
> - they depend
> on your corporate status (eg LLC) - but we are a UK limited company.
>
I just belatedly discovered this question, because Dick took my name
in vain <G> ... I don't suppose the OP is still hanging out here, but
for the benefit of others, I will chime in.
In general, no US federal income tax liability arises for a non-US
corporation organized in a treaty country like the UK unless the
corporation has a permanent establishment in the US. States,
however, are not bound by the treaties. So a UK corporation that is
actually performing services in a US state, or has other connections
with the state that would be sufficient to create nexus for a US
corporation, is subject to state income taxation.
If the OP, through his corporation, actually performed services, met
with the client, etc in Hawaii, then the corporation is subject to the
Hawaii corporate income tax, unless protected by a de minimis rule.
Many other states would take the same position. Probably the only
reason the OP has not heard from any other state is because the states
are unaware that he was ever there.
Hawaii taxable income would be computed by apportioning the
corporation's worldwide net income, as adjusted for US and Hawaii
income tax purposes, by an equally-weighted three-factor formula of
property, payroll and sales. (Hawaii is one of 13 or 14 states that
still use the standard UDITPA equally-weighted three-factor formula,
i.e., it does not put heavier weight on the sales factor.) The
mechanics of the formula are such that it is likely the Hawaii tax
liability would not be substantial.
Katie in San Diego
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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