Doing Business in the United States: U.S. state tax issues facing Canadian companies and their employees

In the past few years, many U.S. states have experienced budget shortfalls, with some of the states being on the verge of bankruptcy. As a result of the current economic environment, the U.S. states have become much more aggressive in taxing foreign corporations and individuals doing business in the United States. Therefore, it has become important for Canadian-based companies wishing to expand their operations in the United States to consider the U.S. state tax consequences to the business and its employees.

For companies sending their employees to the U.S. on business trips and/or short or long term assignments, it can be easy to overlook the state issues that may exist in the face of the U.S. federal tax rules. It is not uncommon for some states to differ in tax treatment on many items, including the treaty relief we often rely on at the federal level. With the increase in awareness at many state tax departments, it is important that these issues be identified and managed where possible.

The webcast archive is no longer available. However, you may download the powerpoint presentation (provided above) that accompanied this webcast when it aired in December 2011. It provides a review of the U.S. state tax landscape, from both a corporate and personal tax perspective, and an overview of the following:

  • How Canadian companies become subject to state taxation, with an emphasis on the following state taxes: corporate income tax, franchise/net worth tax, gross receipts tax and sales/use tax; and
  • How states can differ in their tax treatment for individuals working and/or living in the state.

Please contact any of the webcast speakers listed above if you have any questions about this topic.