What is the difference between intrastate and interstate business?
Interstate business is business conducted between states. For example, if your company in state A provides a product or service for someone in another state (state B), you are conducting interstate business. Intrastate business is business conducted within a particular state. So if a company and customer are in the same state, then you are conducting intrastate business. This is important because states only have the power to regulate intrastate business. Therefore, if you set up an out-of-state company and conduct intrastate business with it in your state of residence, then that company must obtain a certificate of authority to transact business in that state. Furthermore, that company will be subject to any franchise or other tax which your state levies on companies of the same type. Some states, most notably California, have become very aggressive and have probably overstepped their bounds when determining what constitutes intrastate business. For example, a recent California Board
