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What constitutes "transacting business" in Iowa?

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Hi,

 

I own an LLC that is organized in South Carolina.  My business is 100% e-commerce, so I don't have any physical retail stores.

 

I am considering hiring an employee that will manufacture and ship products from their home in Iowa.  Again, this will not be a physical retail store, they will simply fill and ship orders from that location.  

 

My question is:  Do I need to submit a Certificate of Authority to the Iowa Sec. of State?  Their website says you need to if you are a foreign LLC that is "transacting business" in Iowa, but then it never defines what "transacting business" means.  I have read that a lot of states do not consider "mail order or ecommerce" to be "transacting business."  

 

Thanks!

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Your hiring of an employee is transacting business. You will need to have any state required workers compensation, contribute to UI, withhold FICA, fed and state taxes, probably collect sales tax for anything shipped within Iowa, and have proper liability insurance for your products.

 

Yes, you WILL be transacting business in Iowa. No question about it.

 

If you don't believe me I suggest you hire an attorney and a tax pro in Iowa to advise you.

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Read the following part of the Iowa SOS website about what constitutes doing business in Iowa:

 

https://sos.iowa.gov/business/faqs.html#a2

 

Then look up the two statutes referred to for foreign LLCs (489.802 and 489.803):

 

http://law.justia.com/codes/iowa/2016/title-xii/chapter-489/

 

Seems clear to me that your proposed activity is NOT an activity not constituting transacting business which means that it IS an activity constituting transacting business which does require a certificate of authority.

 

 

 

 

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