While the principal focus for government contractors is superior performance on a contract, compliance with the myriad administrative rules can never be neglected. Significant facets of complying with these rules involve being properly registered with all federal and state authorities and the timely filing of tax returns. Most government contractors satisfy these obligations with respect to their federal and domestic state registrations and tax filings. However, compliance regarding activities conducted outside the state of domicile sometimes goes unfulfilled.
Total compliance includes completing all state registration requirements. This usually involves obtaining a certificate of authority to transact business in another state. A business may also need to register with that state’s taxation department. Moreover, a business may also need to register with the local city and/or county to obtain a local business license. After completing the registration processes, the government contractor must shoulder the responsibility of timely filing any and all state and local tax returns.
All businesses must endure these compliance requirements to meet legal obligations. However, government contractors are additionally affected in that a lapse in compliance in these areas can lead to a challenge to a contract by another party. Therefore, it is imperative for the government contractor to assess all registration and tax filing requirements in relation to its activities in other states.