A Reno corporate lawyer can explain the different business models and the advantages of different types of entities. If a person decides he or she wants to form an LLC in Nevada, a Reno corporate lawyer can help the business owner prepare and file the documents necessary. He or she can also advise the client on ongoing responsibilities.
State Business Tax
An LLC in Nevada does not usually pass taxes itself. Instead, the tax obligation passes to the individual LLC members. One advantage to operating a business or working in Nevada is that it is one of a few states that has neither corporate income tax nor personal income tax. As such, no state income taxes are due on the individual LLC members — even on those members who elected to be taxed as a corporation. Therefore, LLC members will not usually owe any state business tax from any profits that they receive from the LLC since there is no corporate or personal income tax.
Many LLCs have employees. They have the obligation to pay employer taxes. Some employer taxes are paid to the federal government by submitting payments to the Internal Revenue Service. Before employment taxes are paid, the employer must obtain a federal employer identification number.
Additionally, employers have to pay state taxes. Nevada uses a modified business tax model. Employers make quarterly payroll tax payments to the Department of Taxation. Tax is due during quarters in which the LLC pays more than a certain amount of money to employees in the form of taxable wages. Before the employer can pay this tax, it has to register with the Nevada Employment Security Division. Employers can set up their account online or can submit the Nevada Business Registration form to the Nevada Employment Security Division. The registration relates to the payment of state unemployment compensation taxes, which are paid to this entity.
Sales and Use Taxes
LLCs that sell goods to consumers in Nevada are required to collect sales tax and forward it to the government. LLCs must register for the payment of sales and use tax with the Department of Taxation. They may register online or download a form and submit it to the Department of Taxation. After registration, the LLC receives a sales tax permit for each location where they sell goods. The LLC is then responsible for paying the sales tax. Payment is made through the Department of Taxation’s online system or through filing the Combined Sales and Use Tax Return from the Department of Taxation.
Each state requires LLCs to file different corporate forms. Nevada requires LLCs to file an annual report. This is commonly referred to as an “annual list” in Nevada. This form requires minimal information, including the names and addresses of the managers and managing members of the LLC. The initial annual report is due on the last day of the month that the articles of organization were filed. For subsequent years, the annual report is due on the last day of the month of the LLC’s anniversary date. For example, if the LLC was formed April 5, the annual report for the first year would be due by April 30. The same due date would apply for subsequent years. If the annual report is filed by the due date, the filing fee is currently $125. However, if the filing is late, penalties may apply. The form can be completed online or downloaded and submitted to the Secretary of State.
Registration in Other States
If the LLC plans to be doing business in states outside Nevada, it may have to register the LLC in these other states. The specific state laws regarding foreign LLCs must be followed. Some will require registration while others may not. Each state has a different definition for what is considered doing business in the state. Doing business in the state may include such activities as:
- having a business location in the state
- hiring employees in the state
- soliciting business in the state through print ads, the Internet, mail or telephone
If the LLC meets the definition of doing business in the state, it may register in that state by obtaining a certificate of authority for this purpose. Legal Assistance For more information on the obligations of creating and maintaining an LLC in the state of Nevada, contact a Reno corporate lawyer from Sutton Law Center by calling (775) 824-0300.