Overview of Nevada LLC Tax Structure
Nevada LLCs have pass-through tax status, meaning no direct federal tax on LLC income. Only personal income tax and self-employment taxes of 15.3% are paid by members. Nevada has no personal or corporate net income tax. Local taxes at the city or county level may apply.
State Requirements and Considerations
- LLC Taxation: LLCs are treated as pass-through entities for federal income tax purposes. LLC income is taxed at individual members’ tax rates. LLCs do not owe state income taxes in Nevada.
- Sales Tax and Reporting: If your LLC sells goods or provides taxable services, you must collect 6.85% sales tax in Nevada. LLCs must file an annual report every year to inform the state about business activities and changes.
- Registration Process: To register a Nevada LLC, complete the official process with the Secretary of State. Non-residents must appoint a local registered agent.
Forming a Nevada LLC – Costs and Benefits
- Nevada LLC formation fees include $425 for the full filing fee. This covers the Articles of Organization fee, Initial List of Managers fee, and Nevada State Business License fee.
- Nevada offers favorable tax structures for small businesses and asset protection benefits for investors. LLCs can select business funding options and benefit from low business taxes.
- Privacy protections, flexibility, and minimal formalities make forming an LLC in Nevada advantageous for many businesses.
Annual Requirements and Compliance
- Nevada LLCs must obtain a $200 annual state business license and file an annual report. Consider adding anti-dilution protection clauses when anticipating new members.
- LLCs must declare a registered agent with an in-state physical address to receive legal forms on the business’s behalf.
Additional Considerations
- Delaware, Nevada, and Wyoming are popular states for out-of-state business owners to incorporate in. Each state has its tax advantages and regulations to consider.