When does a Delaware LLC need to foreign-qualify in another state?

What triggers nexus

Physical presence: an office, warehouse, or storage location in the state. Amazon FBA inventory in a state's fulfillment center can trigger nexus in some interpretations.

Employees: hiring a US-resident employee creates nexus in the state where they work.

Economic nexus: post-Wayfair (2018), many states impose sales-tax nexus thresholds based on sales volume even without physical presence (e.g., $100,000 or 200 transactions in a 12-month period).

Affiliate nexus: relationships with in-state affiliates that generate sales.

What foreign qualification involves

File the state's foreign-LLC application form. State fees vary: California $70 + $800 minimum annual LLC tax, New York $250 + biennial fee, Texas $750.

Appoint a registered agent in the foreign state. Many providers handle multi-state registered-agent service.

File annual reports per the foreign state's rules. Pay any state-specific franchise tax or LLC tax.

California's $800 trap

California charges $800 minimum annual LLC tax on any LLC doing business in California. The threshold for 'doing business' is broad: sales above $711,538 (2025 threshold), or California physical presence, or California-resident employees.

Most non-resident bootstrap founders without California physical presence avoid the $800. Founders with California-based employees or substantial California sales must register and pay.