By: Gloria Petroni, Petroni Law Group
There are many states in the United States that are known for being business-friendly. But, which states are the most favorable place to do business? Of course, the answer is “it depends”. It depends on which factors impacting your business are the most important and which state is most favorable to your business needs.
Nevada Laws. Nevada’s laws, as to limited liability companies and corporations, are similar to many other states. Unless there is some connection to Nevada, there is no reason to form a Nevada entity. Its fee structures for forming the entity and keeping the entity in good standing have risen through the years and now is comparable to the costs of many other states. It generally makes sense to form your entity in the state where it will be located or in which it will engage in business, unless there are reasons to form in another state.
Nevada by the Numbers.The word is out, Nevada’s economy is booming. The state is seeing growth in a variety of industries. Forbes Magazine published an article and a chart on Best States for Business in 2018. Each state was ranked overall, in addition to several specific category rankings. Nevada was ranked #21 overall in favorable business rankings, #9 in overall business costs and #3 in growth prospects.
Another magazine, Chief Executive, recently published an article, 2018 Best & Worst States for Business. Nevada came in at #12 overall, with the following ratings in the individual categories. Nevada ranked #4 in taxation and regulation, #23 in workforce quality and #31 in living environment.
There are reasons for the recent recognition including comparably lower cost of living, reasonable real estate costs when compared to similar ranking states, access to surrounding markets and more.
Tax Savings. Everyone wants the lowest tax on their business revenues. Forming an entity in Nevada will allow you to avoid state income taxes, only if all of the revenue of the entity is derived in Nevada, or other states that do not have a state income tax. If an LLC or corporation formed in Nevada has a presence in another state that that has a state income tax, the other state can tax all income derived within its borders.
In addition to the absence of state income tax, the state of Nevada offers several other tax advantages. Nevada does not have franchise tax, inventory tax, estate tax or inheritance tax. Our state also offers property tax exemptions in several situations, such as inventories held for distribution purposes or all real and personal property that qualifies and is used for the purposed of air and/or water pollution control, among others.
Doing business in Nevada not only offers the quality of life that many businesses look to embrace, but can increase the bottom line for many. The state is creeping up the ranks and becoming well known as a profitable and desirable place to do business.
Our tax advantages, diverse workforce market and advantageous location make Nevada ideal for many businesses.