Nevada State Corporation Tax - The Vote for Nevada

Why Pay State Tax? - It Is Zero in Nevada

January 1, 2005
By Tom SeFack

For most businesses, the Nevada state corporation tax remains by far the main reason to become incorporated in Nevada. Nevada does not charge a tax on the corporation income, regardless of where the profits are earned. (Though, absence of the state corporation tax doesn't automatically mean that there are no other taxes in Nevada.)There are no annual franchise taxes, and no personal income taxes.

Owning a Nevada based corporation, or just doing a major amount of your business in Nevada, is the way to capitalize on the state's liberal tax laws, which especially owners coming from high-tax states can appreciate.

Of course, there is no way to overcome paying the federal income tax, but saving on state taxes makes paying it so much less painful. Nevada C corporations do not have to pay state tax on their profits. Owners of S corporations do not have to pay personal income taxes on their profits coming from the company.

The taxes you save in comparison with other states can help you with building your business substantially. Savings of around ten percent are a huge competitive advantage on markets today, where even slight improvements to the cash flow make considerable difference.

Nevada does not even disclose tax information with Internal Revenue Service. The reverse side to it is that IRS understands that non-disclosure attracts those attempting to evade taxes illegally, therefore Nevada corporations have higher audit rate than corporations in other states. Other states are also known to audit their corporations doing business with Nevada more frequently.

Even with all the benefits of zero corporation tax mentioned, there are several facts to be aware of. For example, any profits of a Nevada corporation paid out to a resident of another state are subject of taxation in that state.

The whole tax issue is rather complex with many variables playing a role and your best bet is to consult with a tax advisor or an expert on Nevada incorporation and taxation.