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Does an out of state federal contractor have to pay state income taxes outside their home state?

I have an S Corporation in WA state but I have a federal contract that requires me to work in OR state for 3-4 days per week. Since I am working in OR am I required to register my corporation with OR state? Also, do I have to pay OR state income tax since I, an employee of my corporation, live in WA state?

Public Comments

1. as an employee of your corporation based in Washington, that is your 'tax home' you file in Wash your S Corp being based in Wash has temporary contracts in another state, therefore you probably need to request information about the temporary status of the corp in that state more than likely you will need to file in Oregon for the S corp on income from that state
2. If you physically do the work in Oregon, the income is Oregon source and yes, they will tax you on it. The fact that you are trying to funnel the money through an S-corp does not change this. You will have to track where you made the money and allocate the income to each state. (In fact, you need to help yourself out by doing withholding on the paycheck for Oregon and ensure the money is sent in.) Since you are doing work in OR, you will have a nexus there. Contact Oregon to ask if you have any filing requirements for the Scorp.
3. I am sorry to inform you that you will have to file a non-resident income tax return for the state of Oregon. In addition, most states require you to register your company in order to do business in their state. Your corporation will have to file a return in Oregon as well. You might have to obtain other business licenses with the local government where you perform your services. Check with the city and county where you work.