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Question by Razious R: Do consultants have to pay state tax if their pay roll comes from out of state where is state tax?
I have taken up a job in Memphis, TN where there is no state tax. But the company through which i am working is based in the Chicago, IL where they have state tax. DO i have to pay state tax even though i am living in TN.
Answer by davidmi711
The general rule is that taxes are due where the income is earned, basically where you perform the work. There are exceptions as each state writes their own income tax laws. If you are doing the work in Chicago, you will most likely have to pay the IL taxes. If you are only working for a company based in Chicago, but doing the work in TN, you should NOT have to pay the IL tax.
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