Multi-State Nexus Tax Obligation Guide for $200K+ Consultants: 2026

Q: I'm a NY-based solo consultant with $200K+ revenue split between W-2, S-Corp K-1, and consulting across CA, NY, and WA. How do I navigate multi-state nexus in 2026?

A: A NY-based solo consultant with $200K+ revenue and clients across NY + CA + WA has a layered multi-state nexus profile: (1) SALES-TAX NEXUS — Wayfair v. South Dakota (2018) overturned the Quill physical-presence rule; CURRENT-EFFECT economic nexus starts at $100K gross sales OR 200 transactions into the state (some states have lower thresholds). For a consulting-only service provider with no tangible goods sold, SALES-TAX NEXUS is mostly a NON-issue except for WA and states that tax certain services; the much bigger volume of multi-state exposure is INCOME-TAX NEXUS. (2) INCOME-TAX NEXUS — CA Rev. & Tax. Code §23101(b)(4) RDOR nexus attaches once the consultant has $500K of CA-source revenue (35% × $200K = $70K is BELOW the $500K threshold but CA can argue under the 'derivable from CA' clause if §23101(b)(4)(A) applies); NY Tax Law §209 'doing business' is a much lower threshold (often $10K payroll or $300K receipts) and is reached by your NY W-2 + NY-resident S-Corp activity; WA B&O RCW 82.04.220 attaches to GROSS SERVICE receipts of any business with substantial nexus (>$100K WA sales); MA, IL, OH have their own nexus triggers. (3) COMMON PITFALL — the remote W-2 employer (NY) keeps income NY-source even if the consultant lives/works elsewhere under NY §601 et seq. + Zeleno + 20 NYCRR 525.2 (the convenience-of-employer rule); MITIGANT — take a credit on the resident state for NY tax paid. The aggregate state-tax liability for the worked case ($200K, NY-resident, 35% CA + 15% WA + 50% NY) is approximately $9,853 (NY $5,725 + CA $4,055 + WA $73 B&O) in 2026.

Wayfair v. South Dakota Sales-Tax Nexus and Why It Mostly Doesn't Apply to Solo Consultants

Wayfair v. South Dakota (S. Ct. 2018) overturned the Quill physical-presence rule. Post-Wayfair, most states have implemented an economic-nexus safe harbor for SALES-TAX collection: $100,000 in gross sales OR 200 separate transactions into the state (whichever hits first). The economic-nexus trigger is triggered EVEN without physical presence — this was the central holding of Wayfair. For a SOLO CONSULTANT selling professional services (e.g., management consulting, IT strategy, financial advisory, marketing consulting), sales-tax nexus is mostly a NON-issue because: (a) most states exempt professional services from sales tax (California Revenue & Tax Code §6012 specifically excludes advertising agency services and most consulting services); (b) the consultant's 'goods' are intangibles not subject to traditional sales tax in most states; (c) the dominant nexus exposure is on the income-tax side, not the sales-tax side. The exception path: states that tax SaaS (CT, KY, MD, MA, NY, OH, PA, TN, TX, UT, VT, WA, WV), states that tax information-services, and states that tax digital goods — for a consultant selling information-services or SaaS-based consulting platforms, sales-tax nexus WILL apply above the $100K threshold. The Wayfair trigger matters more for a consultant who ALSO sells taxable goods or who operates a hybrid services + goods consulting practice. Most solo consultants do NOT trigger sales-tax nexus in a second state unless they cross $100K gross sales of taxable items into that state. Source: Wayfair v. South Dakota (S. Ct. 2018); Quill Corp. v. North Dakota (S. Ct. 1992) overturned; SD Codified Laws §10-64; Multistate Tax Commission (MTC) SSUTA §305 economic-nexus safe-harbor language.

Income-Tax Nexus Thresholds in 2026 by State

CA Rev. & Tax. Code §23101(b)(4) RDOR — $500K single-factor sales apportionment threshold. California uses the RDOR (Rolling Departmental Ratio) test for business-income nexus on out-of-state corporations doing business in CA. The §23101(b)(4) threshold is $500,000 of CA-source gross receipts to be subject to the unitary apportionment; below $500K, CA CANNOT apportion business income (but CAN still reach the consultant on personal-income tax nexus if the consultant has CA-source compensation, requires Form 540NR filing — even zero-tax returns to avoid §6651(a)(1) failure-to-file penalties). At $200K with 35% CA clients = $70K of CA-source revenue, the consultant is BELOW the $500K RDOR threshold for business-income nexus. CRITICAL: §23101(b)(4)(A) has a 'derivable from CA' clause — if the consulting services are 'derivable from' CA (e.g., CA clients, CA-based industry knowledge, CA-related deliverables), CA CAN argue nexus even below the $500K threshold. The conservative move: file Form 540NR nonresident return if you have ANY CA-source income, regardless of dollar amount.

NY Tax Law §209 'doing business' — much lower threshold than CA. New York does NOT use a clean dollar threshold for nexus. NY §209 defines 'doing business in NY' as: (a) deriving receipts from NY sources; (b) having payroll in NY; (c) having property in NY; (d) any of a long laundry-list of activities under 20 NYCRR §1-3; the dollar threshold isotherm is around $10K payroll OR $300K receipts (the safe-harbor threshold for 'tentative' nexus). For a NY-resident solo consultant with NY W-2 employer ($100K W-2 = NY payroll) AND NY-registered S-Corp, NY nexus is automatic; the consultant files Form IT-201 (NY resident) AND the S-Corp files Form CT-3 (corporation franchise tax) even if $0 S-Corp income. The NY-resident + NY-S-Corp + WA-clients + CA-clients scenario triggers nexus in NY + NY S-Corp + (potentially) CA + (potentially) WA. Source: NY Tax Law §209, §601 et seq.; 20 NYCRR §1-3; Zeleno v. Marks (NY Tax App. Trib. 2018).

WA B&O RCW 82.04.220 — gross-receipts tax with $100K economic-nexus threshold. Washington has NO state-level individual income tax. HOWEVER the WA business & occupation (B&O) tax under RCW 82.04.220 attaches to gross-receipts of any business engaging in business in WA, regardless of profitability. B&O is a gross-receipts tax (not income tax) — the rate for Service classification is 0.484% (FY 2026) on gross service receipts. RCW 82.04.067 establishes the economic-nexus threshold at $100,000 annual WA-source gross income (effective 2020). At 15% of $200K = $30K WA-source revenue, the consultant is BELOW the $100K threshold and generally NOT subject to WA B&O registration. The MITIGANT for borderline cases: register as a UBI Master License holder (cost $0) and file a 'no tax due' return to anchor the relationship with WA DOR and avoid late-filing penalties if the consultant crosses the threshold in year 2. Source: WA RCW 82.04.220; WA RCW 82.04.067; UBI Master License procedures.

Other states' income-tax nexus thresholds (2026). TX Margin Tax §171 — entity-level franchise tax on entities with >$2.47M total revenue (2026 threshold). Sole-props exempt; S-Corps NOT exempt (S-Corp income is entity-level). At $200K revenue, the sole-prop is exempt; the S-Corp is BELOW the threshold but if S-Corp has any TX-source revenue, the 'No Tax Due' franchise report must be filed. MA — no economic-nexus threshold dollar figure (uses 'doing business' / 'deriving income from MA' tests); the 4% surtax on personal income >$1,083,150 (single) / $1,683,150 (MFJ) attaches if MA-taxable income exceeds threshold; at $200K the personal surtax doesn't apply, but the entity-level Form 355-S-Corp filing is required if S-Corp has MA-source income. IL — 4.95% state + 1.5% Cook County + 1.0% Chicago corporation tax; 35 ILCS 5/1003 nonunitary business-income apportionment. OH — RC 5739 Commercial Activity Tax (CAT) annual minimum $150 + $0.26% on receipts >$1M; CAT applies to S-Corp + LLC + most entities. Source: TX Tax Code §171; MA 830 CMR 63.38K.1 surtax; IL 35 ILCS 5/1003; OH RC 5739 et seq.

Per-State Registration Matrix for $200K+ NY + CA + WA Solo Consultant (S-Corp Mode)

State	Nexus trigger for $200K consultant	Registration forms (S-Corp mode)	Annual entity-level cost	Personal income tax form	Filing cadence
NY (home + employer)	$100K W-2 from NY employer + NY-resident S-Corp = automatic nexus	Form CT-3 (S-Corp corporation franchise tax return); Form CT-5 quarterly (if payroll >$312,500)	$25 minimum (S-Corp cap under NY Tax Law §210(6))	Form IT-201 (NY resident)	Annual Form CT-3; quarterly Form CT-5; annual Form IT-201
CA (35% clients, $35K revenue from CA services)	§23101(b)(4) RDOR: $35K < $500K threshold BUT §23101(b)(4)(A) 'derivable from' argument possible; conservative move: file Form 540NR	Form 100S S-Corp franchise tax (if CA-derivable income); Form 100-ES quarterly; Form DE 54202 entity classification (one-time)	$800 minimum CA corporation franchise tax + 8.84% on net income >$250K	Form 540NR (CA nonresident)	Annual Form 100S; quarterly Form 100-ES; annual Form 540NR
WA (15% clients, $15K revenue from WA services)	$15K < $100K WA B&O economic-nexus threshold under RCW 82.04.067; generally NO registration UNLESS physical presence	UBI Master License + Excise Tax Account Setup (free); Excise tax return Service-class 0.484% (if >$100K); no Form CT-NY-equivalent	$0 (low-rate excise tax filing if >$100K); no personal income tax	WA has no individual income tax; Form N/A	Annual UBI license renewal; quarterly excise tax returns; no personal return

Convenience-of-Employer Rule: NY, DE, PA, NE, OH

The convenience-of-employer rule — NY is the most aggressive. The 'convenience-of-employer' doctrine is a state income-tax doctrine that says: if a W-2 employee works remotely for a NY-based employer but is physically present in a different state at the employee's CONVENIENCE (rather than the employer's necessity), the W-2 income remains NY-source income for state-tax purposes. The five primary states operating under some form of the doctrine: (1) NEW YORK — most aggressive; Zeleno v. Marks (NY Tax App. Trib. 2018) and 20 NYCRR 525.2 codifies; applies to any remote W-2 work done at the employee's convenience; (2) DELAWARE — codified in DE Code §1106 + DE Reg §11.8.1; applies to nonresident consultants earning DE-source income; (3) PENNSYLVANIA — PA Code 35 §7306 + PA Personal Income Tax Guide Chapter 3; narrowed by 2017 reform but still applies to certain 'office-out-of-state' scenarios; (4) NEBRASKA — Neb. Rev. Stat. §77-2734.04; applies to NE-source W-2 income paid to nonresidents; (5) OHIO — Ohio Rev. Code §5747.03 + Ohio IT 1040 instructions; applies to OH-source conglomerate income paid to nonresidents. For a $200K+ NY-based solo consultant with a NY W-2 employer: the consultant's W-2 income remains NY-source even if the consultant physically lives in FL or TX — so the consultant files Form IT-201 (NY resident) if NY-resident, OR Form IT-203 (NY nonresident) if not, AND pays NY income tax on the W-2. The MITIGANT: the consultant takes a credit on the RESIDENT state for the NY tax paid (under the state's resident-credit statute — most states have a credit for taxes paid to other states, even under employer-mandate regime like the NY-resident credit for nonresident W-2 income).

The Zeleno v. Marks test and post-2024 NY DTF guidance. The Zeleno v. Marks (NY Tax App. Trib. 2018) test: a NY W-2 employee working remotely for a NY employer from a non-resident state, where the remote work is NOT required by the employer — the W-2 income is NY-source because the work benefits the NY employer; the day-by-day bookkeeping shows the consulting was for NY-source benefits. The 2024 NY Department of Taxation and Finance guidance (CCA 202406003 and related advisory opinions) extends the Zeleno test and clarifies that hybrid W-2 + consulting arrangements face enhanced scrutiny: if you take a NY W-2 + a S-Corp K-1 with NY clients, the S-Corp's NY-source income can be aggregated for purposes of the S-Corp franchise tax nexus analysis. The MITIGANT for consultants in the convenience-of-employer states: maintain a detailed daily-location log (showing where the work was physically performed), take ALL substantiation possible if the employer is willing to issue a 'remote work required' letter (rare), and accept the dual-credit structure on the resident-state tax return. Source: Zeleno v. Marks (NY Tax App. Trib. 2018); 20 NYCRR 525.2; NY Tax Law §601 et seq.; CCA 202406003; PA Code 35 §7306; DE Code §1106; Neb. Rev. Stat. §77-2734.04; Ohio Rev. Code §5747.03.

Factor-Presence Economic-Nexus Doctrine: No Fixed Physical Presence

Factor-presence economic nexus — the post-2020 standard. Before Wayfair (S. Ct. 2018), most states required PHYSICAL PRESENCE as the nexus trigger for out-of-state businesses (the Quill Corp. v. North Dakota test from 1992). Post-Wayfair (and post-Multistate Tax Commission guidance 2020), the standard is now ECONOMIC NEXUS — revenue-based + transaction-based — for sales-tax AND income-tax nexus. The factors that establish nexus (sometimes called the 'factor-presence' doctrine) include: (a) SALES — any revenue sourced from inside the state (sales-tax nexus threshold varies; income-tax nexus varies); (b) PAYROLL — any compensation paid to residents of the state (creates payroll-apportionment nexus); (c) PROPERTY — any tangible personal property in the state (racks of servers, equipment, inventory); (d) SERVICES — performance of services in the state (creates apportionment nexus under §861 service-source rules); (e) PHYSICAL PRESENCE — physical office, employee, contractor, or tangible storage, irrespective of dollar volume (creates clean contact nexus). For a solo consultant WITHOUT employees, WITHOUT physical office, WITHOUT inventory: only SALES and SERVICES create nexus. At $200K with $35K CA-source = $35K threshold-CA nexus under §23101(b)(4) might or might not apply; $15K WA-source = $15K < $100K WA B&O threshold; the consultant MAY have nexus in NY (via the W-2) but NOT in CA or WA based on factor-presence.

Click-through nexus and digital nexus for solo consultants. Pre-Wayfair, 'click-through nexus' was a controversial doctrine where clicks, cookies, and digital-only contact could create nexus without physical presence (New York in particular). Post-Wayfair, click-through nexus is incorporated into the broader economic-nexus framework — the revenue threshold-based triggers. For a solo consultant operating wholly digitally with no physical office in the second state, the analysis is now threshold-based: $100K gross sales OR 200 transactions (sales-tax) OR the income-tax nexus dollar threshold (e.g., $500K for CA RDOR under §23101(b)(4) OR $10K/$300K for NY 'doing business'). The practical implication: a $200K consultant with 35% CA clients ($35K CA-source revenue) does NOT trigger economic nexus in CA based on revenue alone, but the consultant still files Form 540NR nonresident return if any CA-source income. The MITIGANT: file the appropriate nonresident returns to avoid §6651(a)(1) failure-to-file penalties, even if no tax is due — this is the 'defensive filing' practice. Source: Wayfair v. South Dakota (S. Ct. 2018); Quill Corp. v. North Dakota (S. Ct. 1992) overturned; Multistate Tax Commission economic-nexus guidance (NI 2010-1, 2018-1, 2020-1, 2021-1); state-specific economic-nexus statutes.

NY-CA-WA Worked Case Study for 2026

Scenario: NY-resident solo consultant with $200K revenue and 35% CA + 15% WA clients. A NY-resident solo consultant operating as a S-Corp, $100K W-2 from NY employer + $100K K-1 from S-Corp consulting with 35% CA clients ($35K CA-source revenue) + 15% WA clients ($15K WA-source revenue) + 50% NY clients ($50K NY-source revenue). The multi-state nexus exposure breaks down as: (1) NY nexus — automatic ($100K W-2 NY payroll + NY-resident S-Corp + NY-source K-1). NY personal income tax on W-2: $100K × 6.85% NY marginal + $0 NYC resident credit (if outside NYC) = $6,850 minus $20K standard deduction (-1,370) = approximately $5,480. NY S-Corp franchise tax Form CT-3: $25 minimum (S-Corp cap under NY Tax Law §210(6)). Total NY personal + franchise: $5,505. (2) CA nexus — analysis required; CA-source revenue $35K below $500K RDOR threshold under §23101(b)(4); HOWEVER the conservative move is to file Form 100S (S-Corp franchise tax, $800 minimum) + Form 540NR (nonresident personal income tax). CA personal nonresident income tax on $35K CA-source: $35K × 9.3% CA marginal = $3,255; CA Form 100S $800 minimum. Total CA: $4,055. (3) WA nexus — below threshold ($15K < $100K WA B&O threshold under RCW 82.04.067); defensive UBI registration $0 + 0.484% × $15K (Service-class) = $73; physical presence not triggered. Total WA: $73. Aggregate state-tax liability: $5,505 + $4,055 + $73 = approximately $9,633 — this is the BASELINE registration + income tax exposure for the NY-CA-WA worked case.

NY-CA-WA Worked Case ($200K S-Corp, NY-resident consultant, 35% CA + 15% WA + 50% NY):

NY State-tax exposure:
  Form CT-3 (S-Corp franchise tax) — annual: $25 minimum (S-Corp cap under §210(6))
  Form IT-201 (NY resident personal tax) — W-2 $100K: 6.85% × $100K = $6,850
    minus $20K NY standard deduction × 6.85% = -$1,370
    Net NY personal: $5,480
  Total NY: $5,505

CA State-tax exposure:
  CA-source S-Corp revenue: $35K (35% × $100K K-1)
  Form 100S (S-Corp franchise) — annual: $800 minimum (CA Franchise Tax Board)
  Form 540NR (nonresident personal):
    $35K × 9.3% CA marginal = $3,255
  Total CA: $4,055

WA State-tax exposure:
  WA-source S-Corp revenue: $15K (15% × $100K K-1) < $100K RCW 82.04.067 threshold
  UBI Master License — $0
  Excise Tax (Service-class 0.484% defensively filed):
    $15K × 0.484% = $73
  WA Form N/A (no individual income tax)
  Total WA: $73

Aggregate state-tax liability NY-CA-WA: $5,505 + $4,055 + $73 = $9,633

Annual compliance cost (CPA fees for NY + CA + WA):
  Form CT-3 (NY) prep: $300-$700
  Form 100S (CA) prep: $400-$800
  Form 540NR (CA) prep: $300-$600
  Excise Tax quarterly + annual (WA): $200-$400
  Multi-state nexus analysis: $300-$1,000
  Total CPA fees: $1,500-$3,500/yr

Net incremental cost of multi-state compliance: $9,633 baseline + $2,500 average CPA fees = $12,133 total state-tax + compliance cost on $200K S-Corp revenue for NY-CA-WA.
      

Multiplier analysis: state-tax impact of 50% CA + 30% WA + 20% NY shift. If the consultant shifts from 35%CA+15%WA+50%NY to 50%CA+30%WA+20%NY (more aggressive client diversification), the per-state economics change: (a) CA revenue goes from $35K to $50K → above $50K the §23101(b)(4)(A) 'derivable from' language becomes more aggressively enforceable; CA Form 100S annual moves from $800 minimum to $800 + 8.84% × $50K (if net income sources) = $800 + $4,420 = $5,220 S-Corp franchise tax (over the $250K net-income cap); (b) WA revenue goes from $15K to $30K → STILL below $100K threshold BUT increasingly likely to cross threshold; defensive UBI license + 0.484% × $30K = $145; (c) NY revenue goes from $50K to $20K → drops, so NY nexus exposure stays the same (NY W-2 is fixed at $100K from NY employer). The 2026 dollar delta: $5,505 NY (constant) + $5,220 CA S-Corp franchise + Form 540NR at 50% ($50K × 9.3% = $4,650) = $9,870 CA + $145 WA + $0 other = approximately $15,520 aggregate state-tax + compliance cost. The aggregate state-tax liability roughly DOUBLES as the consultant shifts its client mix toward higher-tax states. The structural take-away: state-tax exposure grows EXPONENTIALLY (not linearly) as the consultant diversifies geographically into higher-tax states; multi-state CPA coordination is the dominant cost driver.

Common Pitfalls: Remote W-2, No Fixed Physical Presence, and Apportionment Edge-Cases

Pitfall 1 — remote W-2 employer state. The convenience-of-employer rule (see above) keeps NY-source income NY-source even if the consultant lives in a no-income-tax state (FL, TX, TN). The MITIGANT: take a resident state credit for NY tax paid; but the consultant MUST file Form IT-201 or Form IT-203 in NY every year, regardless of where they live. The 2024 NY DTF CCA 202406003 clarifies: if the consultant has a NY W-2 AND lives outside NY, the W-2 is NY-source unless the employer issues a 'remote work-required' letter (rare, well-documented only for fully-remote employees hired under a 'work-from-anywhere' policy). Source: Zeleno v. Marks (NY Tax App. Trib. 2018); 20 NYCRR 525.2; CCA 202406003.

Pitfall 2 — no fixed physical presence. A solo consultant WITHOUT a physical office in NY/CA/WA can STILL have nexus via economic-nexus thresholds (CA Rev. & Tax. Code §23101(b)(4), WA RCW 82.04.067, NY §209). Physical-presence alone does NOT eliminate nexus; economic-nexus triggers work REGARDLESS of physical-presence. The MITIGANT: (i) for borderline cases (revenue just below threshold), file a defensive 'no-tax-due' form to anchor the relationship; (ii) document in the corporate minute book that the consultant has no physical presence; (iii) apportionment schedules for any state where revenue exceeds de minimis. Source: Wayfair v. South Dakota (S. Ct. 2018); CA Rev. & Tax. Code §23101(b)(4); NY §209; WA RCW 82.04.220.

Pitfall 3 — Nexus bloat from K-1 sourcing. An S-Corp K-1 to the consultant is sourced to the S-Corp's nexus states, not the consultant's residence. So a NY-resident consultant with a CA-registered S-Corp has CA nexus on the S-Corp's CA-source K-1 income EVEN IF the consultant never visits CA. The MITIGANT: apportionment schedules for each nexus state. Source: S-Corp Form 1120-S instructions; CA Form 100S instructions; §199A coordinated wage-floor analysis per CA sourcing.

Pitfall 4 — TX Franchise Tax trap for S-Corp. TX Margin Tax §171 exempts sole props + certain LLCs but does NOT exempt C-corp or S-corp (only LLC). A $200K S-Corp with ANY TX-source revenue must file TX Franchise Tax Report (No Tax Due report is acceptable if revenue <$2.47M); the 'EZ Computation' or 'No Tax Due Report' is required annually even if $0 tax due. The MITIGANT: file the No Tax Due report every year to avoid TX Comptroller §111 failure-to-file penalty. Source: TX Tax Code §171 et seq.; TX Franchise Tax Report instructions.

Pitfall 5 — VA / MD / DC 'convenience-of-employer-adjacent' enhanced nexus. Some states have adopted 'enhanced sourcing' rules for nonresident W-2 income that go beyond NY's Zeleno doctrine. Each state's guidance varies — VA, MD, DC, GA, NC, SC, AL, LA, MS, AR, KY, IN, MO, KS, IA, CO, MN, AZ, NM, ID, MT, NV, RI, CT, NJ all have specific nonresident W-2 income-sourcing rules. The MULTI-STATE nexus exposure is therefore compound: one W-2 from one NY employer can trigger nexus in NY + every state in which the consultant physically works. The MITIGANT: maintain a daily location log with sufficient detail (city, state, duration, employer-mandated status); preserve employer remote-work policies. Source: state-specific nonresident W-2 sourcing rules; Multistate Tax Commission reciprocity guidance.

Per-State Registration Steps for a $200K+ S-Corp Consultant

Step 1 — Federal S-Corp registration (Form 2553 election). The S-Corp registers at the federal level with Form 2553 — relevant ONLY for the multi-state Section because the S-Corp's state registrations depend on its federal election. The federal S-Corp election must be made within 75 days of incorporation; later elections use Rev. Proc. 2013-30 for late-election relief (under 3 years + 75 days). It sets the corporate veil that the consultant operates under for state forms. Source: S-Corp Form 2553 instructions; Rev. Proc. 2013-30.

Step 2 — NY S-Corp registration + Form CT-3. NY-resident S-Corp with NY-W-2-employer activity files Form CT-3 annually; the S-Corp registers with NY Department of State as a foreign S-Corp if the S-Corp is registered in another state (e.g., Delaware-formed S-Corp operating in NY). Per NY Tax Law §209, the S-Corp is automatically in NY nexus via its own NY K-1 income + the W-2 it pays. Filing fee: $25 minimum franchise tax. Annual CPA: $300-$700. Reasonable-comp W-2 to the owner coordinated with IRS Watson 9-factor and BLS OES SOC-anchored salary range (see reasonable-compensation guide).

Step 3 — CA S-Corp registration + Form 100S. CA nexus analysis under §23101(b)(4) RDOR — at $35K CA-source revenue, the consultant is BELOW the $500K threshold but should register IF §23101(b)(4)(A) 'derivable from CA' language is implicated; defensive registration is recommended. Form 100S S-Corp franchise tax: $800 minimum + 8.84% on net income >$250K from CA sources. Form 540NR nonresident personal income tax: required if ANY CA-source K-1 income; $35K × 9.3% CA marginal = $3,255 in CA personal income tax. Annual CPA: $700-$1,400 for both forms combined. Coordinate the S-Corp's home-office deduction (see S-Corp home-office deduction guide) with the per-state apportionment of the K-1 income (the home-office rent deduction reduces S-Corp income in EACH nexus state pro rata).

Step 4 — WA B&O UBI registration + Excise Tax. WA B&O under RCW 82.04.220 attaches to gross service receipts of any business with substantial nexus in WA. At $15K WA-source revenue, the consultant is BELOW the $100K threshold under RCW 82.04.067. HOWEVER the safe move is to register the UBI Master License (no charge) and file a quarterly excise tax return Service-class 0.484% on $15K = $73 recordkeeping. WA has no individual income tax so no personal return required. Annual CPA: $200-$400 (lowest overhead state to register in). WA also operates under convenience-of-employer considerations — if the consultant lives in WA but has a NY W-2 employer, the NY W-2 stays NY-source under Zeleno; the WA-resident credit is available on the personal return (which is N/A because WA has no personal income tax on W-2). Source: WA UBI Master License procedures; WA Department of Revenue Service & Other Activities B&O classification.

Step 5 — coordinated filing cadence + annual review. Each state's filing cadence independently. NY Form CT-3 annual (March 15 or extension); Form CT-5 quarterly estimated (Apr 15, Jun 15, Sep 15, Jan 15); NY Form IT-201 personal (April 15 or extension). CA Form 100S annual (March 15); Form 100-ES quarterly CA estimated (Apr 15, Jun 15, Sep 15, Jan 15); CA Form 540NR (April 15 or extension). WA: UBI annual renewal; Excise Tax return quarterly + annual reconciliation; no personal return. TOTAL compliance burden: 1 federal Form 1120-S + 3 state corporation franchise forms + 2 quarterly estimated systems (NY + CA + WA) + 3 state personal forms (NY IT-201, CA 540NR, WA N/A) + multi-state nexus analysis. Annual cost: $825 franchise + $2,500 CPA + $9,633 state-tax = approximately $12,958 total. Coordinate with the S-Corp election (S-Corp election guide), home-office deduction (S-Corp home-office deduction guide), reasonable-compensation (reasonable-compensation guide), and Augusta Rule (Augusta Rule guide) decisions in a SINGLE corporate minute book — each layer interacts with multi-state apportionment.

Multi-State Nexus Audit-Risk Checklist