There are times when the best place to incorporate is close to home.  For example, if you operate a service-based business, or a storefront in your home state, while there can be asset protection benefits, you may think twice about incorporating elsewhere.  You will still have to register your company to do business in your home state.  You will still pay taxes in your home state.  You will still be bound by the laws of your home state.  Plus, you'll have extra filing and maintenance fees as you maintain your company in your home state as well as your incorporating state.  For some, the extra fees are worth the extra asset protection and privacy benefits.  For others, the small extra fees are not material.  It is a judgment call on your part.

Ask yourself these questions:

• Where is my physical business located?
• Where do my employees live?
• Do I invest in real estate, and if so, where is that real estate located?
• Am I planning on selling that real estate and buying other real estate investments in other state(s)?
• Am I planning on moving out of the state and relocating my business?
  

Depending on the answers you may be part of your home state’s tax system.  Don't be fooled by operators claiming that by incorporating in Nevada or Wyoming you won't have to pay any taxes in your home state.  It isn't true and will cause you trouble down the road.

However, if you are a real estate investor interested in privacy and asset protection in your home state or seeking out and purchasing properties in other states, then you may want to consider using a Nevada or Wyoming LLC for the flexibility in moving in and out of states with no additional tax consequences.