DEFINITION of 'Principal Place Of Business'
The primary location where a taxpayer's business is performed. The principal place of business is generally where the business's books and records are kept and is often where the head of the firm – or at least upper management – is located. Corporations are usually required to report their principal place of business to the Secretary of State.
BREAKING DOWN 'Principal Place Of Business'
Taxpayers who work from home must be able to prove that their residence is their principal place of business. Two criteria must be met in order for this to be true:
•The designated place of business within the home must be used exclusively and regularly for the performance and administration of the taxpayer's business.
•There can be no other location where the taxpayer substantially performs these operations.