"Great question - you need to determine what their local laws are first to ensure you can comply with them easily. States like California are harder for smaller businesses since there are a lot of employer requirements. Once you know that you can comply, go to the Department of Revenue site for the state and register your business for Income Tax, and then go to the Department of Labor site to Register for Unemployment Tax. Once you get these accounts set up, make sure you input the withholding in your payroll system. Then make sure to contact your workers' comp company to register the remote address as a work location to be covered. Most payroll systems report taxes for you and have a step-by-step process to help you set it up. If you are doing payroll manually then these are the first steps to take." - Kelly Loudermilk