Seventeen HOT reasons why Nevada should be your home!
- Constitutional ban on personal income tax
- No corporate income tax
- No gross receipts tax
- No franchise tax
- No inventory tax
- No tax on issuance of corporate shares
- No requirements of shareholders & directors to live in Nevada
- No tax on sale or transfer of shares
- No succession or inheritance with IRS
- No sharing of information with IRS
- Simple, inexpensive annual requirements
- One person corporations
- Protection for directors and officers
- No initial or minimum capital required
- Anonymity of owners – total privacy
- Low property taxes
- Business friendly culture
Yes… You’ll prosper, have protection, enjoy the lowest income tax in the United States and find a friendly haven when you incorporate in the state of Nevada. You may think Nevada as a lot of hot desert, neon fast-lane casinos, Tahoe ski vacations and silver mines. That’s Nevada, but only part of the story. Nevada’s leaders have made great efforts to make Nevada the “friendliest to business” state in the country. You can benefit from this right now!
In 1987, the Nevada legislature revised the business corporation laws in order to give you maximum flexibility, maximum benefits and minimum regulation. This law was passed with you in mind. It’s no accident that Nevada has some of the best corporation laws in the country today.
Nevada wants your business. Nevada recognizes that if they welcome business people (the economic engine of the country) with little regulation and great benefits, then ultimately the state benefits. Nevada recognizes the attractiveness of the proverbial “Win-Win” relationship. Even government publications brag about the fact that Nevada has minimal government regulation and maximum flexibility. Nevada is not ashamed of its pro-business posture and is actively fostering the free enterprise system. That adds up to great benefits for you.
Your request for this information tells me that you are one of the increasing number of business people who recognize the tremendous benefits available to you by incorporating. For years, tax professionals and asset protection experts have recognized the advantages of a corporation formed in a pro-business state like Nevada. When you incorporate in Nevada, you gain the flexibility to use your Nevada corporation to eliminate or reduce your state income taxes and lawsuit-proof your assets in the bargain. A true “Win-Win”. A Nevada corporation puts you under a body of law that gives you the ability to make corporate moves that in other states would be burdensome or possibly even illegal.
You’re in control in Nevada. Nevada puts you in the driver’s seat and gives you the ability to make decisions. Less hassles, less legal mumbo-jumbo and less worries about doing something wrong.
One person can hold all positions in a Nevada corporation. In some states, you must designate more than one person as the Officers and/or Directors of your corporation. This is not true in Nevada! Once again, you’ll see that Nevada gives you flexibility. Many states require at least two or more people to be Officers and Directors. When you incorporate in Nevada only one individual is necessary. Nevada lets you decide for yourself. That individual can be all of the Officers and Directors of the corporation. Again, you are in the driver’s seat.
You can have anonymity and privacy in Nevada. Tired of every Tom, Dick and Harry being able to find out about your financial affairs? Tired of having to put everything you do on some public record where a bureaucrat or person looking to rip you off can see it? Then incorporate in Nevada…business is better here. In Nevada there is no requirement for names of stockholders to be filed with the state. Stockholders are anonymous, not a matter of any public record in Nevada. The corporation assets are not associated with you. Anyone can check you out, but if your Nevada corporation (which is a legal person, separate and apart from you) owns certain assets, then those assets aren’t linked to you.
Nevada is the only state in the nation that does not share information with the Internal Revenue Service. Nevada has a strong public policy of protecting the privacy of its corporate citizens. Many tax professionals believe that this fact reduces your chances for an audit which only makes sense. Less matching of tax return information means less chance of something looking out of whack.
The privacy gets even better when you realize that Nevada does not require you to file a list of assets. Your Nevada corporation must only file an annual list of Officers and one individual can serve in all positions. That person could be anyone! With a few wise business decisions, you could be invisible with respect to your Nevada corporation. In fact, we can refer you to attorneys who will be happy to place their name as your corporation’s Officer and Director, leaving you completely in the background.
A Nevada corporation can also issue “Bearer Shares” – these are shares of stock issued to “bearer” and are owned by whoever physically holds the stock. The possibilities for privacy in Nevada are nearly endless. The restrictions of formalities are minimized. The corporation laws of Nevada give you the freedom to operate your business as you see fit with a minimum of special documentation requirements.
Low annual fees. Your annual filing fees in Nevada are much lower that most of the other states. Also, since the paperwork is very simple, the cost and time needed for filing is negligible.
As an officer or director you cannot be held responsible for lawsuits against your corporation. Whether a lawsuit comes as a result of a third party Shareholder or lawsuits filed from totally outside of the company, and did not intentionally break the law, then it is mandatory that the corporation must indemnify them. Many other states use uncertain and vague wording when it comes to your protection, Nevada is rock solid.
No minimum capital required. Many states require $5000 or more in capital – often in cash – to fund a corporation. When you incorporate in Nevada, there is no minimum amount of capital required. You can form a corporation with zero dollars or a million dollars. Again, in Nevada, it’s your choice.
Your directors and shareholders meetings can be held anywhere in the world. You’re not restricted to hold your corporate meetings in Nevada. You can incorporate in Nevada and never see our great state. Although, if you want to see some breathtaking scenery, you may want to consider having at least one meeting here. Whatever the purpose of the corporate meeting, you have the freedom to have it anywhere in the world. Nevada has not made that many rules. You are free to play by your own.
Your Nevada corporation is not restricted to issuing its stock only for cash. In Nevada you can issue stock for cash, property or services at the complete discretion of the Board od Directors which, again, can be one person (you?). Corporation laws vary from state to state. The points above illustrate a burdensome rule or a law other states impose on their corporations. Nevada has eliminated restrictions and improved conditions to make Nevada the most corporation friendly state in the nation. No one really knows which state is the worst to incorporate, but you can be sure Nevada is the best state for your corporation.
So, once you incorporate in Nevada and gain all of the flexibility, control, privacy, protection and all of the tax savings potential available to you – how can you take that corporation you’ve formed and take it to the next level? How can you use that corporation to lawsuit-proof your assets? How can you eliminate your state income taxes or at least greatly reduce them?
You can have both the above benefits when you employ this simple strategy – based on the simple, time-proven concept of two businesses doing business with each other. Two principles are involved. First, states that impose income taxes on corporations doing business within their state do so regardless of the corporation’s state of incorporation. Second, a corporation with no assets, or one that is in debt, has nothing to lose if a lawsuit hits it. It doesn’t matter if you get a million dollar judgment against a corporation that has nothing. You will get nothing. By putting these principles to work for you, you can lawsuit-proof assets and eliminate or reduce state income taxes.
Here’s how it works: Make sure your Nevada corporation meets the legal criteria of doing business only in Nevada. Then, all its income will be earned state income tax-free since Nevada has no state income tax.
Form two corporations. “Wait!” you say. “I don’t do business in Nevada.” Just remember your Nevada corporation is a separate legal person. You could use two corporations. One corporation could do business in Nevada; the other could do business wherever you do business now. Lets call the one that does business in Nevada, “XYZ Nevada, Inc.” You can set up a second corporation wherever you are doing or contemplating doing business. We’ll call that corporation “Ext., Inc.”
Complete the paperwork. Now it’s easy. You simply cause XYZ Nevada, Inc. to do business with Ext., Inc. Your Nevada corporation provides products, services or possibly it loans money to Ext., Inc. This creates expenses to Ext., Inc. To pay the expense, Ext., Inc. would write checks or possibly go into debt.
Nevada Residency Information
Taxpayers wishing to establish state residency in Nevada will have to pass the test identifying Nevada as the state with which they have the closest ties during the taxable year. Various factors are considered, including:
- Where you are physically present
- Where you have sources of income
- Where you register to vote
- Where you own a house
- Where you claim the homeowner’s exemption
- Where your driver’s license is issued
- Where your closest business contacts are (i.e. attorneys, accountants, banks, etc.)
- Where you closest social contacts are, including clubs
- Where your vehicles are registered
- Where your minor children attend school & whether you paid resident tuition
- Which state has jurisdiction in the administration of your wills & trusts
- Where you maintain a safety deposit box
- Where you file an affidavit of domicile
- Where you obtained a homestead exemption
Individuals who are “domiciled” in Nevada and become Nevada residents will generally escape state taxation of their income, except for income arising from sources within another state. Even taxpayers who may continue to be required to “source” one or more items of their income to a taxable state may still enjoy a significant reduction in their overall state tax burden.
A corporation organized and domiciled in Nevada could significantly reduce its state tax burden. States generally tax corporate business income based on the corporation’s level of activity within and outside of that state. Therefore, shifting at least part of the corporation’s business activities to Nevada will generally result in a reduction of state tax. In addition, being organized and domiciled in Nevada will eliminate state taxation of the corporation’s non-business income. Likewise, trusts with Nevada fiduciaries can gain a significant tax advantage. In California, for example, trusts with a California fiduciary are taxed on income retained in the trust, even if all beneficiaries are California non-residents. With a Nevada fiduciary, non-California source income, distributed to non-California beneficiaries or retained and taxable in the trust, will escape California taxation.
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The above information has been provided for free. This information is not guaranteed in any way. Craig Zager, Coldwell Banker Select Real Estate, can recommend Nevada tax advisers for your specific needs. Call Craig Zager for a list of qualified professionals to minimize your tax liability. 800.827.4541.