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District of Columbia LLC and Corporation Registration and Formation

Date: 04/24/2019 | Category: | Author: Jakub Vele

District of Columbia LLC and Corporation Registration and Formation

District of Columbia being the capital of the United States of America, presents just the right platform and avenues to small and mid-sized businesses, and even micro-businesses to grow, expand, and reach out to a global audience. A diversified economy with a gross state product of $141 billion in the 2nd quarter of 2018, it is considered to be the 6th largest metropolitan economy in the nation. You can form a District of Columbia business in any of the major Industries in DC include technology, retail, tourism (it is now the 2nd largest industry), Federal government, media & communications, and higher education among others. In fact, DC is home to a strong concentration of global institutions as well as local representation of major companies.

A vibrant and resilient economy driven by private sector expansion wherein private sector GDP in Q2-2016 was $83.4 billion!

You are probably wondering what the process for LLC formation or incorporation is. This is where we can be of help! We as one of the top District of Columbia registered agents can assist you with the successful registration of your business entity in the state.

District of Columbia LLC Registration and Formation

District of Columbia LLC Registration & Formation

LLC company formation in District of Columbia is governed by Code of the District of Columbia, Division V – Local Business Affairs, Title 29-Business Organizations, Chapter 8 – Limited Liability Companies. The procedure for formation of LLC is as follows:

Step#1: Maintain a registered agent

If you are planning to form a Limited Liability Company in District of Columbia then you will be required to continuously maintain a registered agent in the state pursuant to District of Columbia Code § 29–104.04. This law is applicable for domestic limited liability company as well as foreign limited liability company.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in District of Columbia. We can assist you to form a District of Columbia business LLC.

Step#2: LLC Name Reservation

One of the foremost steps towards company formation in District of Columbia is identifying a name for your business entity. The process is as follows:

  1. Identify a unique name for your business entity
  2. According to District of Columbia Code § 29–103.01 and § 29–103.02, the name should contain the phrase or words “limited liability Company” or the abbreviations “L.L.C.”, or “LLC”.
  3. The chosen name should be distinguishable and should not be deceptively similar to the name of any limited partnership, corporation, or limited liability company
  4. Apply for reservation of name pursuant to the provisions of District of Columbia Code § 29–103.03
  5. Submit the form though mail or online with the Department of Consumer and Regulatory Affairs, Corporations Division along with the applicable fee. An LLC can reserve its name for a period of 120 days.

Step#3: Articles of Organization and Foreign Registration Statement

If you are planning to form a District of Columbia business LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. The steps are:

  • If you want to register a domestic LLC then you will be required to file “Articles of Organization” governed by D.C. Code § 29–802.01.
  • If your business entity is a foreign LLC then you will be required to file “Foreign Registration Statement” pursuant to D.C. Code § 29–105.03.
  • The Articles of Organization and Foreign Registration Statement of domestic and foreign LLC can be filed with the Department of Consumer and Regulatory Affairs, Corporations Division through mail or by hand.

We can file the form on your behalf being your registered agent in the state and provide you with certified copies of the LLC registration.

In case, you have any questions regarding how to form a District of Columbia business, feel free to call us on 702-871-8678.

District of Columbia Corporation Registration and Formation

District of Columbia Corporation Registration & Formation

If you are planning to form a Corporation in District of Columbia then the procedure for registration and formation is as follows:

Step#1: Maintain a Registered Agent

If you are planning to form a business or professional corporation in District of Columbia then you will be required to continuously maintain a registered agent in the state pursuant to District of Columbia Code § 29–104.04. This law is applicable for domestic as well as foreign corporations.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in District of Columbia. We can assist you to form a District of Columbia business as we are in compliance with all regulations in the State of District of Columbia.

Step#2: Corporate Name Reservation

In order to form a corporation in District of Columbia, one of the key steps is identifying a name for your business entity. The process is as follows:

  1. Identify a name for your business entity
  2. According to District of Columbia Code § 29–103.01 and § 29–103.02, a corporate name should contain the phrase or words “corporation”, “company”, “incorporated”, or the abbreviations “Corp.”, or “Inc.”
  3. The chosen name should be distinguishable and should not be deceptively similar to the name of any limited liability company, limited partnership, or any other corporation
  4. Apply for reservation of name pursuant to District of Columbia Code § 29–103.03.
  5. Submit the form though mail with the Department of Consumer and Regulatory Affairs, Corporations Division along with the applicable fee. A business corporation can reserve its name for a period of 120 days.

Step#3: Articles of Incorporation and Foreign Registration Statement

If you are planning to form a corporation in District of Columbia, then the most important step is to prepare and file the proper documents for a business corporation. The steps are:

  • If you want to register a domestic corporation then you will be required to file “Articles of Incorporation” pursuant to D.C. Code § 29–302.02.
  • If your business entity is a foreign corporation then you will be required to file an “Foreign Registration Statement” to transact business in the state pursuant to District of Columbia Code § 29-102.11.
  • The application or documentation for registration of a corporation can be filed with the Department of Consumer and Regulatory Affairs, Corporations Division – through mail or by hand.

We can file the form on your behalf being your registered agent in the state and provide you with certified copies of the incorporation.

If you have any questions regarding District of Columbia incorporation or LLC formation, you can simply visit the District of Columbia Business formation page.

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Incorporate in District of Columbia

Date: 04/23/2019 | Category: | Author: Jakub Vele

Incorporate in District of Columbia

A global city with a highly educated workforce, District of Columbia provides businesses with just the platform they require. Incorporation in District of Columbia means you will have access to global influencers and policymakers. There are a variety of DC industries that your business can be a part of like the hospitality industry, which is one of the strongest sectors. Data Science & Analytics, Retail, and Security Technology are also some of the top industries. One of the salient aspects of DC is the “smart city” initiative wherein it is ranked 6th smartest city in the World according to IESE Cities in Motion Index 2017. Economically, it is on the rise with the real gross domestic product (GDP) of the District of Columbia in 2017 crossing the $110 billion mark.

Home to Lockheed Martin, Freddie Mac, Fannie Mae, and 18 other Fortune 500’s!

Why Choose District of Columbia for Incorporation?

If you are planning to set up company in District of Columbia then the good news is that it is the perfect platform for small businesses. In fact, the small business scene in D.C. area has everything right from sewing studio’s to fish-and-chips shop, prohibition-inspired gin distillery, and pie shop with music rehearsal studio, and many other innovative businesses.

Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses:

Supermarket Tax Incentives

As a part of the Supermarket Tax Exemption Act of 2000, DC will waive fees and tax to retail and grocery stores located in specific neighborhoods. This is an incentive directed at encouraging investment and development in areas that lack access to fresh food and groceries. You can avail of the incentive post company incorporation in District of Columbia. A supermarket or retail store can receive the following benefits for a period of 10 years post renovation or development:

  • Exemption in business license fee
  • Exemption in real property tax
  • Sales and use tax exemption especially on building materials used for construction
  • Exemption in personal property tax

Eligible Areas | More Information

How do you incorporate in District of Columbia?

What is the process of incorporation in District of Columbia? What type of documentation is required? These are some of the common questions that you will be confronted with if you planning to start a new business in the state. The following steps will enable understanding of the entire process:

Business Type

The first step towards company incorporation in District of Columbia is choosing the type of business you want to form. You can choose to form an LLC or a Corporation. The type of business entity you want to form can be domestic or foreign entity. The forms and fee will be different for each type of entity.

Business Entity Name

One of the most important steps towards incorporation in District of Columbia is naming your business entity. You have to start by identifying, searching, reserving, or registering the business entity name. There are 3 steps towards business name formation and they are:

  1. Naming Requirements: According to District of Columbia Code § 29–103.01 and § 29–103.02, the name of a business entity should contain words like “corporation”, “incorporated”, “limited liability company” or abbreviations like “corp.”, “inc.”, “ltd.”, “L.L.C.”, ”Ltd., ” or similar abbreviation.
  2. Business name search: You need to search for a business name that is not in use currently. You can conduct name availability search here.
  3. Name Reservation: Once you have identified business entity name, you will have to reserve the name pursuant to District of Columbia Code § 29–103.03 as a part of company incorporation in District of Columbia process. You can reserve the name for a period of 120 days with the Department of Consumer and Regulatory Affairs, Corporations Division.
  4. Name Registration: According to District of Columbia Code § 29–103.04, a foreign business entity that is not registered to do business in the District under subchapter VI of this chapter will be required to register its name, or an alternate trade name as required by § 29-105.06. A foreign business entity will be required to submit the name registration application with the Mayor’s office.

Choose a Registered Agent

Whether you form a corporation or an LLC business entity, in order to transact business in the state of District of Columbia, you will have to maintain a registered agent pursuant to District of Columbia Code § 29–104.04 (July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(a)(18), 59 DCR 13171).

We are one of the respected registered agents in Washington DC and will be responsible towards initiating incorporation in District of Columbia through processing of your Certificate of Formation and Application for Registration for LLC and Articles of Incorporation and Certificate of Authority for business corporations.

Articles of Incorporation and Foreign Registration Statement

You will be required to file “Articles of Incorporation” pursuant to D.C. Code § 29–302.02, if your business is a domestic corporation. You will have to file a “Foreign Registration Statement” pursuant to District of Columbia Code § 29-102.11, if it is a foreign business entity. In order to streamline the process of company incorporation in District of Columbia, we can file documents on your behalf through the online process or through expedited process.

Date Stamped Copies

As a part of the process of company incorporation in District of Columbia, we will ensure, you receive date-stamped and filed copies that verifies the state has filed as well as formed your corporation.

Costs and Fees associated with District of Columbia Incorporation

What would it cost to set up company in District of Columbia? Check Fees here!

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Wisconsin Business License

Date: | Category: | Author: Jakub Vele

Wisconsin Business License

Wisconsin is a paradise for start-ups as it offers several benefits and a wide variety of incentives. In order to set up a business and make it operational, you will need to

  • Register your business first
  • Ensure you have a proper business license

It is important to know that every Wisconsin start-up doesn’t require a business license, however certain businesses may require single or multiple licenses or permits. Some of these permits and licenses are regulatory in nature i.e., they cover specific business activity. The regulatory licenses and permits are issued by different state agencies while the tax-related licenses are issued by the Department of Revenue (DOR). There are business activity specific licenses and permits issued by divisions of the Department of Health Services and Department of Natural Resources.

The question is, how do you know what type of Wisconsin company license or permit you require and which state agency is responsible for issuing it.

Step-by-Step Guide to a Business License in Wisconsin

Here is a step-by-step approach towards acquiring a business license in the state of Wisconsin:

Step#1: The Industry or Business Type

How would you know what type of business or professional license is required to operate in Wisconsin? The type of industry or the activities of a business entity helps in identifying the type of business license required.

The license or permit can be obtained from various state agencies directly depending on the type of business you have. Let’s take a look at some examples to understand this better:

Food, Dairy & Restaurant Licenses

Issued by: State of Wisconsin, Department of Agriculture, Trade and Consumer Protection (DATCP)

The Wisconsin company license that fall under this category varies according to the type of business activity. Let’s take a look at some of the different types of business activities and the license fee.

  • Butter maker – Fee: $75 (2 years)
  • Cheese maker – Fee: $75 (2 years)

​Food Processing Plant License (Wholesale) – Fee: The business license fee varies based on the annual production like the fee for annual production of at least $250,000 is $835 and there is also a “License Surcharge” of $100. More Information

Food Retail License/ Retail Food Establishment – Fee: The business license fee varies based on total food sales like the fee for ​food sales of at least $25,000 but less than $1,000,000 is $265 and there is also a “License Surcharge” of $100. More Information

THE LICENSING PROCESS

Alcohol Beverage License

License Issued by: State of Wisconsin, Department of Revenue

The retail business license allows sale of alcohol beverages to individual retail customers, from a specific place or premises. The alcohol beverage licenses can be classified as under:

  • “Class A” liquor licenses
  • “Class “A” fermented malt beverage licenses
  • “Class A” (cider only) licenses
  • “Class B” liquor licenses
  • “Class C” wine licenses
  • Temporary Class B licenses often known as picnic licenses

Fee: The fees for a business license in Wisconsin for alcoholic beverages are set by local municipalities, within the limits set by the state law. A Class “B” Beer retailer license has a fee of $100 per year while that of a Temporary Class “B” (beer) license is $10. There is also a “Reserve” Class B intoxicating liquor license where the minimum fee is $10,000.

Application: There are different forms for different categories of licenses like AT-106 for Original Alcohol Beverage License Application and AT-315 for Temporary (Picnic) License Application

More Information

Step#2: Licenses issued by City/County

If your business or industry type doesn’t fall under a statewide license then you will have to check with the local city or county office. A Wisconsin company license can also be issued by local counties or cities in which the business is located. Let’s look at an example to understand how this works.

If you are planning to establish your business in Madison & Dane County then you will have to apply for a business license through Public Health Madison & Dane County (PHMDC). There following licenses or permits are issued in these counties:

  • Bed & Breakfasts
  • Hotels
  • Short-term Rentals: Tourist Rooming Houses
  • Restaurants and Retail Stores
  • Farmers’ Markets
  • Mobile Food Establishments
  • Temporary Food Stands
  • Tattoo & Body Piercing Licensing
  • Water, Well & Septic Permits

You can check the fee for your business license in Wisconsin here.

Download General Business License

Step#3: Issuance of a Business License

How is a business license in Wisconsin issued? You have to identify the following to complete the process:

  1. The type of business or industry
  2. Do you need a license or a permit?
  3. Will it be issued by the state or the city or county?

Once you have identified the above, all you need to do is either download the application online or contact the concerned state department or city of clerk office.

It is important to note that a business license or permit will have to be renewed annually unless specific dates have been mentioned, to keep the business operational.

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Advantages of Incorporating a Business in Wisconsin

Date: | Category: | Author: Jakub Vele

Advantages of Incorporating a Business in Wisconsin

What makes “America’s Dairyland” one of the best places to grow or expand your business? A start-up company in Wisconsin can leverage several aspects of the pro-business environment, which includes favorable tax policies, rapid industry development, strong infrastructure, good connectivity with transportation hubs, availability of business funding, and skilled and dedicated workforce. The state is home to the top 6 start-up eco-systems in the country and Milwaukee, WI is considered as the numero-uno place for food entrepreneurs. The state has been built on the backbone of a strong agricultural tradition that has evolved and expanded over a period of time along with manufacturing, advanced machinery, biohealth, aerospace, and material sciences among others.

Business Growth Incentive for New Businesses

The gains are plenty if you register a new company in Wisconsin and these gains can vary from funding opportunities to deriving exemptions and credits on taxes. The various incentives available can be categorized under the following industries:

  • Agriculture
  • Arts
  • Construction & Housing
  • Green/Energy
  • Logging
  • Manufacturing
  • Printing & Advertising
  • Recreation
  • Retail & Services
  • Transportation
  • Others including Enterprise zones

Let’s take a quick look at the advantages of forming an LLC or a Corporation in Wisconsin.

Advantage#1: The benefits of Incorporation or LLC formation

Corporation

  • Credits for businesses: If you register a new business in Wisconsin as a business corporation then you can take advantage of several credit programs. This includes 13 types of tax credits available for corporations that can be claimed against the corporate income as well as franchise tax. The different types of Corporate Non-Refundable Credits available to businesses include:
    – Manufacturer’s Sales Tax: The maximum credit amount available is $6,142,807
    – Manufacturing Investment: The maximum credit amount available is $22,170,938
    – Research Facility Credit: The maximum credit amount available is $23,331,973
    – Dairy and Livestock: The maximum credit amount available is $133,458,349
    – Development Zone: The maximum credit amount available is $10,214,549
    – Economic Development: The maximum credit amount available is $25,971,668
    – Historic Preservation: The maximum credit amount available is $3,628,623
    There are many more tax credits that a startup company Wisconsin can leverage from. These credits have been grouped into five general categories, which are:
    – Industry-specific credits,
    – Research credits,
    – Zone-based credits,
    – Credits for economic development,
    – Agricultural credits
  • No Income Tax: If you register a new business in Wisconsin as an S Corporation, you can benefit from the fact that there are no income taxes to be paid and an S corporation loss or income will be passed through to the stockholders. It is also important to know that there are a few exceptions though.

LLC

  • Flexible Profit Distribution: A startup company Wisconsin LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
  • Sales and Use Tax Exemptions: Wisconsin provides a variety of exemptions targeting startups in specific industries like farming, construction, printing, manufactured home production, logging, and newspapers. Some of the most popular exemptions include:
    – Manufacturing Machinery and Equipment: A startup company Wisconsin can benefit from a comprehensive sales and use tax exemption especially when purchasing machinery and equipment to be used directly in a manufacturing process.
    – Manufacturers’ Materials: The state of Wisconsin will exempt businesses from sales and use tax on any tangible personal property that is consumed during the manufacturing process or loses its identity while in the process of manufacturing of tangible personal property.
    – Pollution Abatement, Waste Treatment, and Recycling Equipment: A business will be exempted from sales and use tax on waste treatment facilities and pollution abatement equipment. Businesses will also enjoy exemptions on any replacement parts, and supplies to be used for waste treatment and pollution abatement.

Advantage#2: Wisconsin Business Incentives

Once you register a new company in Wisconsin, there are several business incentives and programs that your company can benefit from. Let’s take a look at some of the most popular programs:

  • Wisconsin Enterprise Zones: If you register a new company in Wisconsin in the enterprise zone then there are several incentives that will benefit your business including tax credits. The program has been implemented in the state by the regional economic development division of the Wisconsin Economic Development Corporation (WEDC). The primary objective of the Enterprise Zone (EZ) Program is to incentivize those projects that involve expansion of existing Wisconsin businesses or even relocation of business operations from other states to the EZ. Businesses can enjoy tax credits on several areas like job retention, job creation, employee training, capital investment, and supply chain investment. Know More
  • Development Opportunity Zone Tax Credit (DOZ): The primary aim of the Development Opportunity Zone (DOZ) Program is to incentivize new as well as expanding business in the cities of Janesville, Beloit, and Kenosha. The program has been implemented by the Wisconsin Economic Development Corporation (WEDC) and you will have to apply to the regional economic development director to avail the tax credits under this program. These Development OZ tax credits will be available to a startup company Wisconsin if they are involved in job creation, job retention, capital investment and environmental remediation within the mentioned opportunity zones. Know More

Are there any Disadvantages of Incorporating in Wisconsin?

If you register a new business in Wisconsin, you will be able to enjoy several benefits in the form of tax credits, grants, loans, Enterprise Zones for Development and Opportunity zone programs, sales and use tax exemption, capital gains deferral, and much more. So, the big question is – are there any disadvantages? In reality, there are no disadvantages as such except the ones that are specific to the type of business you register like an LLC has a limited life and can get dissolved if a member dies. Similarly, incorporation can lead to higher overall taxes and this is where you can find relief in the form of the tax credit programs.

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Nevada Commerce Tax

Date: 04/06/2019 | Category: | Author: Jakub Vele

Nevada Commerce Tax - All You need to Know

With your company registered in Nevada, there are many things that you need to take care of. And one of the main things is complying with the laws and paying the applied taxes on time. Speaking of taxes, Nevada has always been a favorite for many entrepreneurs when it comes to starting a company here. And the simple reason for this is that the state has never imposed any gross receipts tax, Nevada commerce tax or business income tax.

Being a “tax-free state,” Nevada has always attracted a lot of businessmen to set up their companies here. As a matter of fact, any business that wants to incorporate outside from their “home” state usually choose Nevada as the state to incorporate in due to the lack of the state income taxes and the low filing fee. But recently in a 2015 Legislative Session, there was a new law created. This law is called the Nevada Commerce Tax law.

The Nevada Commerce Tax

It was before the 78th Nevada Legislative Session when the “The Revenue Session” was dubbed in reference to the bipartisan acknowledgment of the legislators that the legislation has to meet the growing budget demands of Nevada. Then in 2015, during the session, the new Commerce Tax was introduced. And the aim for the tax was to increase the revenue for the education system in the state.

The new Nevada Commerce Tax is a tax that is imposed on the rights of a person who is earning from a business that is registered Nevada. This tax is only applied to those businesses that have a gross income that exceeds $4 million in a taxable year.

Moreover, there is still no tax imposed on personal income. The government aims at imposing the tax on the strong business revenues and not on the wages. And with the new Business Taxes in Nevada (Senate Bill 483 (SB 483)), a company has a threshold of $4 million that can be deducted from the gross revenue when finding the Nevada Commerce Tax liability.

As a matter of fact, it is not the threshold for filing. This means that any company that is running a business in Nevada has to file the Commerce Tax Return. This is regardless of it the company’s tax liability unless the company is exempt from filing for the tax return.

So, if a company earns an amount that is less than $4 million as total income in a fiscal year (financial year), they can select the box on the form of the Nevada Commerce Tax Return indicating that the company has an income that is below the threshold. This form would then have to be submitted to the government. On the other hand, those that have an income that exceeds the threshold would have to calculate the liability of the Nevada Commerce Tax.

And it is normal for all the additional state taxes that come in to be burdensome for many businesses, but the Nevada Commerce Tax has many unique aspects as shared below:

  • Tax is imposed on a separate entity basis.
  • Taxpayer funding is used for potential state audit expenses.
  • A fiscal year filing requirement.
  • Virtually no deductions from gross receipts.

What entities are subjected to the Nevada Commerce Tax?

Those businesses that are engaged in business within Nevada are subjected to the Business Taxes in Nevada. A business entity means a:

  • A corporation (C- or S-corporation)
  • A joint venture (Note: This includes any joint venture, excluding the co-ownership arrangement or joint operating company, that meets the requirements of 26 C.F.R. §1.761-2(a)(3), Treasury Regulations §1.761-2(a)(3) and that elected out of the federal partnership treatment as offered by 26 U.S.C. §761(a).)
  • A partnership
  • A limited-liability partnership
  • A joint stock company
  • A proprietorship
  • A business trust
  • A bank
  • A holding company
  • A Limited-liability company
  • A business association
  • A professional association
  • A savings and loan association
  • A sole proprietorship
  • Independent contractors
  • The individuals with rental real estate or royalties
  • Or any other person that is engaged in business in Nevada, which also includes a natural person who files schedule E, part I, with their Federal tax return.

“Engaging in business” means that continuing, conducting, and commencing a business and the exercise of franchise or corporate powers concerning a business, without any limitations.

Let us take an example to understand this better:

Example: KLMNOP Inc. is corporation that is incorporated in Nevada and has the license to work in Nevada. Now, let us say that all the activities of the business are in California and there isn’t any income in Nevada for the company. In this case, the company would have to file the Commerce Tax Return in Nevada. Nevertheless, since it is not getting any income from Nevada, it would not have a tax due.

But remember that the filing is an important step that has to be done regardless of if the company is getting income from Nevada or not, and if the company has a Nevada license to do business. Moreover, the companies that are set up in other states but are engaged in business in Nevada are also obligated to file the Nevada Commerce Tax Return.

In short, the activities that are subjected to the imposition of the tax includes renting, leasing, or selling personal or real property in Nevada, offering services while being physically located in Nevada, holding and maintaining a business facility or place in Nevada, entering into a contract to work in Nevada, and having employees in Nevada. So, if any company is performing any of the above mentioned activities have to file for the business taxes in Nevada.

Which Entities are Exempt from the Nevada Commerce Tax?

Yes, there are some organizations that are not obligated to file for the Nevada Commerce Tax. And the entities that are exempt from filing for the new Nevada Commerce Tax include:

  • IRC 501(c), NRS 82 and NRS 84 non-profit organizations
  • Grantor trusts
  • Credit unions
  • Business entities organized pursuant to NRS 82 or NRS 84
  • Passive entities
  • Real Estate Mortgage Investment Conduits
  • Governmental entities
  • Certain Real Estate Investment Trusts
  • Individuals
  • Entities that only manage and own intangible investments, that includes patents, trademarks, stocks, bonds.

Entities that are exempt from the Commerce Tax must file an Exempt Status Entity Form with the Nevada Secretary of State. The exemption remains in place until the status of the business changes.

What is Taxed?

The Commerce Tax applies to gross revenues that are “sitused” in Nevada. Such gross revenues include:

  • revenue from rents, royalties, and sales of real property are sitused in Nevada if the real property is located in Nevada;
  • revenue from rents and royalties from personal property are sitused in Nevada if the personal property is located or used in Nevada;
  • revenue from the sale of personal property is sitused in Nevada if the property is delivered or shipped to a buyer in Nevada, regardless of the origin or other condition of sale; and
  • revenue from transportation services is sitused in Nevada if both the origin and destination points of the transportation are located in Nevada.

The legislation also contains a “catchall” provision for gross revenue not otherwise described, which is extremely broad and undetailed. The “catchall” was a subject of substantial discussion at the initial regulatory hearing before the Department of Taxation (Department) on July 7, 2015, and is likely to be clarified as the Department establishes its regulations on this tax.

Returns, Commerce Tax Year and Filing Deadline

The Commerce Tax year runs from July 1 through June 30. Returns are due 45 days following the end of the tax year. For 2016, the filing deadline was Aug. 15, 2016. A 30-day extension of time to file is available upon written request – currently there isn’t a separate form for the extension request.

Penalties and interest will be assessed if the Commerce Tax Return is not timely filed or the tax timely paid, based on the amount of unpaid tax. For this first tax year, there is a grace period until Feb. 15, 2017 to file and pay the tax. Penalties and late charges may be waived if the return is filed and the amount due is paid during the grace period if there is good cause for being late (i.e., the failure occurred despite the exercise of ordinary care and was not intentional or due to willful neglect). Waivers will be determined on a case-by-case basis.

Each separate entity must file its own Commerce Tax Return – there is no provision for consolidated returns. Simplified reporting is available for entities with less than $4,000,000 gross Nevada revenues for the year; and, returns can be filed online.

Fiscal year tax

The tax year is a fiscal year ending June 30. The report is due 45 days after the end of the fiscal year ending June 30, 2017. This means your commerce tax return and payment will be due August 14, 2017.

You may request a 30-day extension by written request with “good cause” before the due date. SB 483 does not provide a clear nexus standard applicability to the commerce tax and does not address the applicability of the physical presence nexus standard and Public Law 86-272.

Exclusions and deductions

There are exclusions and deductions from gross revenue. However, there is no deduction for cost of goods sold or other expenses incurred. The commerce tax rates vary depending on the industry type, based on your North American Industry Classification System (NAICS) code. The NAICS code reported on the initial return links your status with the state. If an appropriate NAICS category cannot be determined, the unclassified rate of 0.128% will be applied. The rates range from 0.051% to 0.331%.

The Welcome Letter

All Nevada entities should have received a “Welcome Letter” with information regarding the Commerce Tax filing requirements and enrollment instructions. Due to difficulties in implementing the tax, some entities may not have received the notice and other entities that have no Nevada revenues may not realize there is still a filing requirement. Additional information regarding the filing and registration requirements can be found on the State of Nevada Department of Taxation website.

This Taxpayer ID number is different from your Nevada Business ID number which is located on your Nevada State Business License. Your Taxpayer ID number is what you will use to file the Commerce Tax Return. If you did not receive a letter, please contact the Nevada Department of Taxation Taxpayer Call Center at 866-962-3707 to get the Tax ID number assigned to your business.

Steps to Take Before Filing for the Nevada Commerce Tax Return

Now that you know the basics of the Nevada Commerce Tax let us understand what to do next. So, before you can file, there’s a couple of steps that you’ll need to take:

STEP 1: You have to determine your NAICS code, that’s the acronym for the North American Industry Classification System from the 26 different categories selected by the state to choose from. To determine which NAICS code applies to your business you can look it up at the following link http://www.naics.com/search/ and then drill down from the initial category to determine which one best describes your primary business activity.

Please note: If your business operates multiple types of businesses under its single entity that don’t fall under the same NAICS code (like a bar and laundromat), the NAICS code would be the category where the highest percentage of revenue comes from.

STEP 2: You have to mail in or file online at http://tax.nv.gov/comtax/ the Commerce Tax Additional Information Form which is how you complete your registration. The state has to gather information such as your federal tax id number; the names and addresses of the owners, partners, corporate offers, managers and members of the business.

They also want to know if you’re enrolled in any other taxes in the state such as the Modified Business Tax – which is tied to a Nevada business that has Nevada employees; The Sales/Use Tax applies if you sell tangible goods in the state whereby you have to collect and remit the sales tax.

Use Tax means that if you bought something outside the state of Nevada and did not pay sales tax, that by law you’re supposed to report and pay the sales tax that you would have paid had you purchased the same item in the state.

Certificate of Authority relates to a retailer who does not maintain a place of business in the state, but obtains a certificate authorizing him to collect the sales tax from a purchaser here and then turns around and pays the sales tax to the state. Typically, you see this with online retail organizations.

Excise taxes apply to sales of gasoline, cigarettes, alcohol, cellphones, and vehicle registration and title fees all of which are flat per-unit taxes that must be paid directly to the Nevada government by the merchant before the goods can be sold. You must submit the Commerce Tax Additional Information Form so you will be ready to file by August 15th.

How to file for the Nevada Commerce Tax Return?

Now, let’s talk about the Commerce Tax Return in detail so that you know what you are doing. If your business’s gross revenue, that’s money earned only in the state of Nevada, ranges from zero to $3,999,999.99 cents during the state’s fiscal year which begins July 1 and ends on June 30th, the following year, you qualify for the simplified reporting. You still have to submit the tax return which may take 2 minutes to file online, but remember the really good news, there’s no tax due! Here is the link to the various Business Taxes in Nevada – https://www.nevadatax.nv.gov/

Future heads up. If you’ve always been under the four million mark and during the next fiscal year, again that’s July 1 through June 30th your status changes, meaning you now have Nevada gross revenues that exceed four million dollars, then be aware you’ll need to complete the entire tax return the next time you file. As I said, it may take two minutes to file if fall under the four million in gross revenue so let me share this quick instruction of what you’ll need to complete:

  • Fill in the taxable year (example July 1, 2015 through June 30, 2016)
  • Fill in the State Tax ID Number as shown on the Welcome Letter/upper right hand corner.
  • Fill in the NAICS code
  • Fill in the Business name
  • Fill in the Business address
  • Check the box: I declare that the Gross Revenue from engaging in business in Nevada of the above Business Entity did not exceed $4,000,000 during the taxable year.
  • SKIP TO BOTTOM OF FORM: Check the ‘Under Penalty of Perjury’ box, sign, put in your phone number, name, title and date.
  • PRINT THE RETURN for your records.

Then Hit the Submit via email button to complete the filing online, or you can mail it to the Nevada Department of Taxation

Please make sure you task yourself to file the tax return every August 15th, because the state will not send any reminders. Also, make sure you keep copies of your returns for a minimum of four years, however I recommend you keep them for as long as you have the business.

Now, let’s move onto those businesses that have Nevada Gross Revenue that Exceeds Four Million dollars. The date to file is still August 15th and of course, you have to pay the commerce tax which is based on the rate associated with your NAICS code. You can request an extension to file for up to 30 days without penalty but, if there are any taxes due, interest will accumulate along with any penalties assessed after the 30-day extension expires.

If you’re a Nevada resident and your business is incorporated outside of Nevada, you should complete the Nexus Questionnaire to determine if you are subject to the commerce tax. Most likely not, but you better make sure. Here is the link to it – http://tax.nv.gov/uploadedFiles/taxnvgov/Content/FAQs/COM_nexus_questionnaire.pdf

I can’t even begin to describe how complicated they’ve made the ability to calculate the tax which for some there is at least a few tax credits and/or industry-specific deductions that can be applied against the gross revenue. I’m going to recommend you use the services of a tax professional and maybe more specifically a Nevada based tax professional to prepare your commerce tax return because remember this return is based on the gross revenue you generated during the state of Nevada fiscal year end, not your company’s regular fiscal year end. We can, of course, offer some great recommendations for our clients.

One note of caution. If you have or are going to go out of Business in the State of Nevada, I suggest you call us here at Sage International to provide assistance with properly dissolving the company. Think about it, without properly dissolving and filing final tax returns, both the IRS and the State of Nevada have every reason to believe you are still in business and are legally required to file annual tax returns.

Since there’s no getting around the requirement to file, I wanted to make sure everyone who has a Nevada corporation or Nevada LLC understands the full meaning of “staying in compliance.”

Items to consider

Other than what has been explained above, there are some things that you would have to keep in mind so that you file the Nevada Commerce Tax Return in the right way. These are the things that you would need to consider:

  • The fiscal year for the commerce tax is July 1 – June 30, regardless of your own tax year, and reporting can be cumbersome for many entities. Consider how to tailor reporting processes to comply.
  • In the event of an audit, you are responsible for the actual expenses or costs to execute the audit. Entities that keep records outside the state of Nevada are liable for an “amount equal to the allowance provided for state officers and employees while traveling outside of the state for each day or fraction thereof” during an examination.
  • Establish the correct NAISC code on the tax return, as it can be cumbersome to change the code for future filing periods. The commerce tax has 26 business categories.
  • Specific exclusions and deductions are listed, although be careful when determining any deduction to the commerce tax.
  • The commerce tax is set on a separate entity basis, and no guidance is set for consolidation or combination.

Conclusion

The doubling of the annual license fee for corporations is quite hefty, and will probably cause some entrepreneurs to rethink the popular trend of incorporating in Nevada.

If you’re wondering where to incorporate or form an LLC, here’s the advice I have been giving small business owners for years. And this advice hasn’t changed because of the new Nevada commerce tax policy. If you’re a small business (less than five shareholders), it is generally best to form your business in whatever state you live in or operate your business from.

The bottom line is that you are going to be subject to the tax laws and pay corporation maintenance fees for whatever state you conduct your business in. So if your business is located in California and conducts business there, you can’t escape paying state taxes to California just because you incorporate in Wyoming or South Dakota. Contact IncParadise to know more!

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Wisconsin LLC and Corporation Registration and Formation

Date: | Category: | Author: Jakub Vele

Wisconsin LLC and Corporation Registration and Formation

You can form a corporation in Wisconsin or any other business including Domestic and Foreign Limited Liability Companies, Nonprofit Corporation, Sole proprietorship, and Partnership. One of the growing sectors in Wisconsin today is the Aerospace industry, which is home to 200 companies. In fact the industry in the state is ranked #1 for fabricated metal product manufacturing and appliance and component manufacturing. The Aerospace industry is ranked #2 for machinery manufacturing and plastic and rubber product manufacturing. The 7th largest in terms of Wisconsin exports, the industry crossed $500 million mark in 2016. Today, the industry is becoming quite a favorite for start-ups.

How do you form a Wisconsin business? This is where we can provide the necessary assistance as we are one of the top registered agents in Wisconsin.

Wisconsin LLC Registration and Formation

Wisconsin LLC Registartion & Formation

LLC company formation in Wisconsin is governed by 2011 Wisconsin Code, Chapter 183, Limited liability companies. The procedure for registration and formation of LLC is as follows:

Step#1: Maintain a registered agent

If you are planning to form a Limited Liability Company in Wisconsin then you will be required to continuously maintain a registered agent in the state pursuant to 2011 Wisconsin Code § 183.0105. This law is applicable for domestic limited liability company as well as foreign limited liability company.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Wisconsin. We can assist you to form a Wisconsin business LLC.

Step#2: LLC Name Reservation

One of the foremost steps towards company formation in Wisconsin is identifying a name for your business entity. The process is as follows:

  1. Identify a unique name for your business entity
  2. According to 2011 Wisconsin Code § 183.0103, the name should contain the phrase or words “limited liability company” or the abbreviations “L.L.C.”, or “LLC”.
  3. The chosen name should be distinguishable and should not be deceptively similar to the name of any corporation, or limited liability company
  4. Conduct a name search here.
  5. Apply for reservation of name pursuant to the provisions of 2011 Wisconsin Code § 183.0104 for a domestic LLC name. A foreign LLC will have to register their business name.
  6. Submit the form though mail or online with the State of Wisconsin, Department of Financial Institutions, Division of Corporate and Consumer Services along with the applicable fee.
  7. An LLC can reserve its name for a period of 120 days.

Step#3: Articles of Organization and Certificate of Registration

If you are planning to form a Wisconsin business LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. The steps are:

  • If you want to register a domestic LLC then you will be required to file ” Articles of Organization” governed by 2011 Wisconsin Code § 183.0202.
  • If your business entity is a foreign LLC then you will be required to file an Application for “Certificate of Registration” pursuant to 2011 Wisconsin Code § 183.1004.
  • The Articles of Organization and application for Certificate of Registration of domestic and foreign LLC can be filed with the State of Wisconsin, Department of Financial Institutions, Division of Corporate and Consumer Services, in person or online.

We can file the form on your behalf being your registered agent in the state and provide you with certified copies of the LLC registration.

In case, you have any questions regarding how to form a Wisconsin business, feel free to call us on 702-871-8678.

Wisconsin Corporation Registration and Formation

Wisconsin Corporation Registration & Formation

If you are planning to form a Corporation in Wisconsin then the incorporation will be governed by 2011 Wisconsin Code, Chapter 180 – Business corporations. The procedure for registration and formation is as follows:

Step#1: Maintain a Registered Agent

If you are planning to form a business or professional corporation in Wisconsin then you will be required to continuously maintain a registered agent in the state pursuant to 2011 Wisconsin Code § 180.0501. This law is applicable for domestic as well as foreign corporations.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Wisconsin. We can assist you to form a Wisconsin business as we are in compliance with all regulations in the State of Wisconsin.

Step#2: Corporate Name Reservation

In order to form a corporation in Wisconsin, one of the key steps is identifying a name for your business entity. What is the process? The process is as follows:

  1. Identify a name for your business entity
  2. According to 2011 Wisconsin Code § 180.0401, a corporate name should contain the phrase or words “corporation”, “company”, “incorporated”, or the abbreviations “Corp.”, or “Inc.”
  3. The chosen name should be distinguishable and should not be deceptively similar to the name of any limited liability company, limited partnership, or any other corporation
  4. Apply for reservation of name pursuant to 2011 Wisconsin Code § 180.0402.
  5. A foreign corporation would be required to register their name pursuant to 2011 Wisconsin Code § 180.0403.
  6. Submit the form though mail or online with the State of Wisconsin, Department of Financial Institutions, Division of Corporate and Consumer Services along with the applicable fee. A business corporation can reserve its name for a period of 120 days.

Step#3: Articles of Incorporation and Certificate of Authority

If you are planning to form a corporation in Wisconsin, then the most important step is to prepare and file the proper documents for a business corporation. The steps are:

  • If you want to register a domestic corporation then you will be required to file “Articles of Incorporation” pursuant to 2011 Wisconsin Code § 180.0202.
  • If your business entity is a foreign corporation then you will be required to file an application for ” Certificate of Authority” to transact business in the state pursuant to 2011 Wisconsin Code § 180.1503.
  • The application or documentation for registration of a corporation can be filed with the State of Wisconsin, Department of Financial Institutions, Division of Corporate and Consumer Services, in person or online.

We can file the form on your behalf being your registered agent in the state and provide you with certified copies of the incorporation.

If you have any questions regarding Wisconsin incorporation or LLC formation, you can simply visit the Wisconsin Business formation page.

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