NV LLC Operating in CA

Today TaxMama® hears from Janet in the TaxQuips Forum, with this question.  “Is an LLC registered in NV and doing business in CA required to pay California’s $800 LLC taxes?”


Dear Janet,


In fact, you may be subject to CA’s Gross Receipts Tax, too, depending on how the LLC reports its income.  And you need to register it in CA as a foreign LLC, too.

Why did you register in NV? Were you planning to move out of state?

Just before the corporate filing deadline on March 15th, one of my clients told us that he had set up, not just one, but TWO corporations during 2012. Both were set up out of state. One, a holding company for an asset, he had arranged by himself. The other, his attorney had handled. BAD NEWS!

You don’t put appreciating assets into a corporation. When you sell it, you pay tax twice – once on the profit; again on the dividends when you distribute the profit.

The other was an online retail store shipping from CA. I can’t understand why a CA attorney doesn’t know the company still needs to register in CA. Makes me crazy. We will be talking to that attorney – and SOON!

Meanwhile, for you. If you’re operating a business in your own state and/or in your own home – register it IN your state. You will save a ton of money and headaches. Believe me.

And remember, you can find answers to all kinds of questions about setting up entities in tax-free states and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

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