california: I definitely did NOT perform any of the 1099 work in New York or California. I perform all the work in Massachusetts and then FedEx the work to New York or California. Would I need to pay state taxes to New York or California? Thank you!|||You pay taxes in the state in which you reside. It is as simple as that.|||The IRS is not the best authority on STATE tax issues. You need to check with someone in the state tax office of the states you do business in. In your situation, I would say you only owe Massachusetts taxes. If you drove to New York and did work IN New York, I would say you might owe NY taxes, on that income only. You would also include that income on the MA return, but get a credit for the taxes paid to NY. To Ash79: Taxes returns are usually filed in the state you live in AND the state you work in. You usually get a credit for the taxes paid to the non-resident state on the resident state tax return.|||Best way to answer is what I was told by the IRS. I run My own truck and live in South Carolina. The company I have my current contract with is in North Carolina but i also deliver products with my truck to company's all over this Great USA. IRS simply asked where is your BASE of operation ,meaning where do you keep your files and home. Told them South Carolina. Then I would pay my normal IRS taxes and file state taxes with only South Carolina.