donn0128 wrote:
Setup your business in a state more friendly to people like Florida. Then, no matter where you work you only pay FL taxes. I used to work all over North America and I only paid taxes where I lived. Your taxes are based on business address, not where the physical work was done.
This is not really true. As a small to very small business, Donn is correct, where you file your state income tax return will be the tax controlling entity. If you get bigger, or do all your work in a taxable state and then file elsewhere, they are eventually going to come after you. Things like collecting and paying sales taxes, registering your business with a state etc. is going to tip off that state that you need to be filing and paying income taxes.
An extreme example is professional athletes. No matter where they live and where their team is based (say a Dallas Cowboy, in Texas a state where there is no income tax) they still have to pay state income taxes in each state where they play a game and thus earn income. That Dallas Cowboy has to pay Pennsylvania state income on the game they play in Philadelphia each year. They have to pay income tax in California if they play the Rams or the 49ers at their stadiums. Conversely, the Rams players only pay California taxes on the income earned playing in California and can deduct the income they pay taxes on from their games played in other income tax states.
A photography business will likely fall under the radar, but it is still not technically correct that the state where your business is located is the state where you have to pay your taxes. If that was the case, every business and every employee would claim a residence or office in a low or no tax state and avoid state taxes altogether.