U.S. partnership and/or corporate tax returns are required to be filed when a company is doing business in the U.S. You can be treated as doing business in the U.S. if your Canadian company is selling goods on the American market or if it is sending people to the U.S. to provide services. In addition to the U.S. federal tax filing, you may also have multiple state filings to complete depending on the level of activities in the state.
Tax treaties are a tool used by corporation tax accountants to minimize double taxation situations. If a treaty position is relied upon, it is required to be disclosed with the appropriate tax authority. In the case of a treaty position taken on a U.S. income tax filing, it is important to note that most U.S. states do not acknowledge the treaty the same way it is recognized for federal tax.
