Do I need to register my business in other states?

Q: I have a registered sole proprietorship in the state of Connecticut. It is a consulting company. As I expand my business, I have potential clients in Mass. and New York. Do I need to register my business there or just pay taxes to those states? —Dianne, Rocky Hill

The following answer was provided by Mark Misselbeck, CPA, Levine Katz Nannis & Solomon PC, Needham.

A: Whether or not you need to register and pay taxes in a state beyond your home state depends on how you conduct your business. If you render your services from your place of business in your home state and deliver the results by mail or over the Internet, you probably don't need to register or pay taxes to another state.

If, on the other hand, you enter into the other state to gather information, prepare reports in the other state and/or enter into the other state to present the results, personally, then you will need to register to do business in that state (including your "Doing Business As" [DBA] name for your business. If you are using an LLC designation, you will also need to register that and, in Massachusetts, pay an annual fee of $ 500 to maintain that status.