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Corduroy Frog

How Many States???

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I've looked at a 1065 with an associate of mine who is concerned things aren't being handled right.  This one is probably for Judy because of her geographical area.

The "tax matters person" is a Nebraska corporation.  There are two other corporations which form the LLC (filing as a partnership).  One of the corporations is in Maryland, and the other is in Tennessee.  The three corporations bill the LLC, who in turn bills the customer, and after paying the three corporations, there is profit, all of which is taxable.

The LLC is chartered in Delaware, as an attorney advised them their liability would be lower.  I've seen this before, but I'm not aware of any peculiar tax advantage (or disadvantage) for a charter in Delaware.  The partners operate in Texas and have fixed assets in Texas as well.  The LLC itself does not operate either in Delaware or Texas.

There are two tax forms filed - a Federal Form 1065 and a Nebraska partnership return.  All of the state allocations are 100% for Nebraska.

My question:  Does Delaware require a tax return to be filed?  Charter is there, but zero operation.

How about Texas?  LLC does not operate in Texas but they have equipment there.  Each of the three partners operate in Texas but not the LLC.

I'm leaving out Maryland and Tennessee - although the respective partners there should file with those states.  The LLC does not physically operate in either Maryland or Tennessee, but make substantial payments to the members.  I don't believe the LLC has a filing responsibility to either of these.

Long story short, does the LLC have responsibility to file in either Delaware or Texas?

Thank you in advance for wading through this post -



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Can't help you with Texas.  With the facts as presented, this partnership would NOT be required to file a Delaware Form 300 partnership tax return.  It would need to file an annual report for its franchise tax with the DE Secretary of State each year though, and that must be filed via the internet.


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