Live in CA and invest in MD, Where should I file my LLC?

[Erick Chavarria]

Hi BP family, 

So I live in California and want to buy property in Maryland, (buy, rehab and hold). Will it have a tax impact if my LLC is registered in CA and doing business in MD versus having it registered in MD where the properties are?

A fellow investor I spoke to said that aside from filing fees it makes no difference. According to him: Legally: if the LLC gets sued Maryland laws would apply because that's where the lawsuit would be whether the LLC was formed in MD or CA.

Tax-wise: He says since it's a passthrough entity  I will have to pay California income taxes either way since that's where I reside. Also, MD taxes will have to be filed in either scenario because that's where the investment properties are located. 

Do yo guys agree? any thoughts will be greatly appreciated.