07/20/2023
There’s no denying that it can be tempting to form a limited liability company in a state that’s considered to be a “tax haven” like Delaware or Wyoming. However, the advantages of forming a business in these states are often drastically overstated.
When you form a business in the more tax favorable states, but you still operate in your home state, you’ll still need to pay taxes in the state where your LLC does business. For example, if you and your company or located in California, and that’s where you conduct business, even if you form your business in Nevada you will still be responsible for taxes on your California-based transactions.
Furthermore, if you form your LLC in another state, you’ll still need to register it as a foreign LLC in your own state. This means that you may actually be subject to more fees and compliance responsibilities than you would be if you had simply formed an LLC in your home state.
If you have more question about forming an LLC or a corporation, please give our office a call at 916–235–9348.
Nothing in this post should not be taken as legal advice.
