Personal Income Tax Rules Vary by State
If you operate your business as a sole proprietorship or a pass-through entity, then your business income will be taxed as personal income. The impact of this varies widely--from states that have no personal income tax to those with high personal income tax rates.
Business Income Tax Depends Upon Entity Type and State
If you do business in a state, you may very well have to file an income tax return and pay taxes in that state. Plus, the way in which a state taxes a business depends upon whether the business is a corporation or a pass-through entity.