Nevada Corporation Fee Breakdown

Nevada's Senate passed the largest tax increase in the state's history on the last day of the 2015 legislative session by an 18-3 vote. The tax plan, which was announced by Republican Governor Brian Sandoval, will add more than $1 billion to Nevada's public education budget.

Effective July 1st, 2015, annual and initial fees for corporations doubled from $325 per year, which included $200 for the state business license and $125 for Annual List of Officers, to $650 annually. LLCs increased by a smaller amount, up to $350 from $325 per year.

The initial and annual list of officers or managers fee increased by $25 to a total of $125 each year for all entities, including Limited Liability Companies (LLCs) and Limited Partnerships (LPs) as well as corporations.

Nevada was once known as the "New Delaware" because it charged reasonable upfront fees and a flat annual fee for corporate filings. Small business owners who wanted to avoid high-fee states such as New York and California headed to Nevada instead. However, this changed after 2015 when these annual fees effectively went up to $325 and the state required that all entities have a business license registration, even if they did not intend to operate their business inside the state.

If your entity is in "Revoked" or "Default" status and you reinstate either on or after July 1st, 2015, you will need to pay the increased fees. One example, if your corporation's status is "Revoked" and it is overdue for three years of annual list fees, the cost of reinstating your corporation in Nevada would be $825 for each year, including late fees, and a $400 reinstatement fee, for a total of $2,875.

Nevada Payroll Taxes

The 2015 legislation also extended and made permanent the payroll tax, which otherwise would have expired in June 2015. Most companies are now assessed at a tax of 1.475 percent against employee payroll payments. The rate is 2 percent for financial and mining institutions. However, businesses are able to credit 50 percent of their gross receipts against the payroll tax.

The Nevada Department of Taxation has faced a larger workload as a result of the 2015 tax legislation, including monitoring 27 gross receipts, as well as collecting payroll taxes subject to gross receipt reductions and new taxes on out of state company transactions. Indeed, the expanding Nevada state workforce, accompanied by larger pension obligations and more salaries, is likely to be the most significant effect of the 2015 tax legislation.

Why Not Move Your Inc or LLC

Due to the increase in corporation fees, you may consider moving your charter to one of several other states, even if your LLC or INC is already registered in Nevada. You might, for example, consider moving your entity to Wyoming, which has an annual fee of only $50.

If you do decide to move to Wyoming, you can:

  • Realize net savings in your first year and $600 annually after that.
  • Keep your corporation's original Employer Identification Number (EIN) and date of formation.
  • Retain contracts with partners and vendors.

The savings for LLCs are slightly smaller at $300 per year because overall fees are less.

Yearly Requirements

You will need to have a Nevada state business license in order to incorporate a corporation in Nevada under Chapter 78 of the Nevada Revised Statutes.

Your Nevada state business license must be renewed annually through the payment of an annual fee. There is a $100 fine if you do not submit the fee by the deadline.

Advantages of a Nevada Corporation

  1. Directors, officers, and shareholders do not need to be citizens of the United States and do not need to hold meetings or live in the state.
  2. Directors do not have to be shareholders.
  3. Directors and officers of corporations registered in Nevada may be protected from personal liability for lawful acts of the corporation.
  4. Corporations in Nevada are able to transfer, hold, or sell shares of their own stock.
  5. Nevada corporations can issue stock for services, capital, real estate, or personal property, and that includes options and leases. Additionally, the directors can make the final decision on determining the value of all of these types of transactions.
  6. There is no income tax in Nevada on corporations or the state's citizens.
  7. In Nevada, corporations are not subject to hidden taxes, such as inventory taxes, franchise taxes, or capital stock taxes.
  8. Sales tax only applies to products that are sold in Nevada.
  9. Nevada's corporate structure ensures investors and owners of Nevada corporations have more privacy.

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