PO Box And Tax

[denis]

Hello,

My business is located on the east coast. We are making some trip to the west coast sometimes for sales purposes. We were thinking to rent a mail box on the west coast (california) in order to be able to give a local address to our clients and make them feel comfortable. Obviously, this will be only for marketing purposes (business card, website...) and we will have no employee there or even an office space. In such a case, should we register our business with the State of California?
Thank you
Ddblu

[vangogh]

Welcome to the forum Denis. I don't think you would have to, but at the same time I'm not sure why not. Since you really wouldn't have a physical presence in the California, I don't think you need to register. I couldn't be mistaken, but I don't think the PO Box address would be considered a physical presence. However, why not register the business? I'm guessing it costs a little more in California than other states, but I'm also guessing it's not a lot. Why not claim your business name in the state since you're doing business with people in the state.

You might want to look through the website for the Secretary of State of California (http://www.sos.ca.gov/business/forms.htm). The link takes you to the page that links to forms for registering. The site should have information about what's involved in registering and whether or not you'd need to.

[tallen]

Take a look at this FAQ from the link Van Gogh posted: Frequently Asked Questions - Business Entities - California Secretary of State (http://www.sos.ca.gov/business/be/faqs.htm#form-question7)

In most states, you must register as a "foreign" (out-of-state) business if you transact any business in that state. I would think having your Cali customers send their payments to a PO Box in California would qualify as transacting business in that state.

[denis]

Thank you all for your replies. Basically, I understood if I register in California, then I would have to file a tax report there. Also the cost to do business is CA is $800 a year. It is a lot of costs and headaches just to have a PO box there. Besides, my client in CA will usually send all correspondence directly to our main office on the east coast. I do not intend to use this PO box to receive mail. It is just to give a good feeling to my clients in CA and for marketing purposes (business card, website...). I check the frequently asked question. Of course, they do not answer clearly but strongly recommend that to register with them.

What do you think?

[Jayde]

I think it is very misleading to give your California customers a California address to trick them into thinking they are doing business with a California based company, when you are in fact on the East Coast. What is the nature of your business?

[denis]

Our sales manager is visiting California on a regular basis (once every 2 months). We import goods from overseas that we wholesale to professional. We are not a retail point. Like I mentioned before, all our sales will go through our main branch on the west coast. I do not think it is misleading. The CA office purpose is just to make the client aware that we visiting CA state frequently. Any other idea?

[tallen]

It is a lot of costs and headaches just to have a PO box there.

So skip the PO Box in California. I guess I just don't see the point. If you provide great service to your California customers, then it shouldn't matter that you are located on the east coast.

[Freelancier]

Renting a PO box is having a physical presence in the state. It's going to be looked at as being the exact same thing as renting an office you never visit. You still have a "presence" in the state and are subject to state laws related to any transaction that happens in the state (which would then also include any sales you make to customers within the state). If a "warm fuzzy" for your clients is worth that, then go ahead and register your business and get all the licenses and such. Otherwise, just don't.

[vangogh]

From what you describe it doesn't sound like it's worth it. Unless you think you're losing clients because you don't have a CA address. Could your sales manager print a business card specifically for CA clients. Maybe it could say show the company and show CA sales manager or something like that. The area code on his phone number wouldn't be a CA area code, though that's not as big of a deal now with people keeping a phone number with them regardless of where he moves. You could probably get a phone with a CA area code too if you want.