Posts Tagged ‘Energy’

Comparing Incorporation Heavens

November 10th, 2022

It is commonly recognized today that Delaware,Guest Posting Nevada and Wyoming can all be called “incorporation friendly” states due to their corporative laws and relatively low (or non-existent) fees and taxes. However, how would a person choose between the three? This article runs a comparison between the three states, summarizes the differences, and presents conclusions and tips to help you make a more educated choice of incorporation state.

Delaware is good for big business

In general, Delaware, through its developed legal system and laws protecting shareholder rights, is geared toward the large complex public corporation, whereas and Wyoming are more attractive to the small privately held corporation. Delaware law tends to protect the rights of boards of directors and shareholders, while Nevada and Wyoming tend to favor management.

Does it mean Delaware is not the best place to incorporate your new business? Not necessarily. The choice to incorporate in Delaware depends on the long term goals of your corporation.

Delaware has an excellent body of corporate case law spanning 110 years regarding such matters as management / shareholder issues and mergers / acquisitions, and that’s precisely why the Fortune 500 are drawn to this state. Delaware laws tend to be “pro-management” when it comes to minority shareholder disputes. Huge public companies have literally hundreds of such disputes pending in the courts on any given day.

So if you are aiming to grow your company to become a Fortune 500 company (or at least planning it to attract VC investors and possibly go for IPO one day), Delaware’s case law offers many insights into what you can and cannot do, and what the likely consequences may be.

Unfortunately, Delaware also has corporate income tax, personal income tax, a state franchise tax, reporting requirements and regulations compelling disclosure of substantial amounts of information resulting in far less privacy for you. That makes Nevada and Wyoming much more attractive for small privately owned businesses.

Nevada or Wyoming?

Here are some things you should consider when choosing between those two states:

1. Information sharing with IRS:

Nevada is famed as the only state that does not share information with the IRS. Although that fact by itself is true, there are few things that you should know about it.

First of all, Wyoming does share information with the IRS, but only the information given by companies with real assets inside the state. So if you don’t have any real estate in Wyoming you are as protected in that regard as in Nevada.

Second, Nevada makes IRS mad. That means if you are in Nevada the IRS is targeting you because you are in a “non friendly” state.

An Accountant Talks About The Many Benefits Of Living In Nevada

April 1st, 2022

Living in the state of Nevada may not seem special, but it is a big deal as far as taxes are concerned. Nevada is one of five states that do not have a personal income tax. As an accountant who works with individuals and businesses in Nevada, I wanted to discuss the tax benefits of living here.

No Make-Up Taxes

If a state does not have a personal income tax, they tend to make up for it with another tax. For example, the state of Texas does not have a personal income tax, but property taxes are substantially higher than in other parts of the country. Nevada is the best of both worlds because there is no state income tax, there are really no hidden taxes, and our sales tax is not outrageous.

Where Does Nevada Get the Money?

Historically Nevada gets the needed tax revenue from the mining, casino, and construction industry. The state needs the money to fund emergency services and other state services, so in this state that is how they make up for not having an income tax.

What Does It Mean?

If you compare our taxes to our neighbor to the west, California, we have huge benefits. The first is the income tax benefit, because California has income taxes of up to 9.3% at the individual level. In addition, the utility cost, and other costs to run a business are substantially lower in Nevada. Because of the lower taxes, Nevada is known to be great place to relocate your business to.

Other Reasons to Move to Nevada

The other major benefits for moving to Nevada are related to energy efficiency. Nevada is a state that sees a lot of sun and wind. Because of the surplus of sun and wind, companies who are exploring alternative energy may choose to relocate to Nevada. We also are an attractive state to geo-thermal companies with the numerous hot springs we have. As an accountant, I think that Nevada has many benefits and if you are thinking about relocating your business, it might be the right place.

Why Do Some Businesses Not Move To Nevada?

Although I think there are some great financial benefits and energy benefits to moving to Nevada, there is one thing that restricts some companies-water. When I worked for a division of Dole, we considered moving our frozen fruit operation into the state of Nevada for all the reasons that I talked about before. We could save a lot and it looked like a good decision until we realized that water is not abundant in Nevada. The reason that we did not move to Nevada was that we required a large volume of water.

If you are considering moving your company to Nevada, you should contact an experienced accountant and discuss the benefits. You will also want to consider the cost to move your company. Sometimes the cost to move will be so large that the savings will never make up for it.