LLC in another state taxes [You Asked]

Last updated : Aug 28, 2022
Written by : Fritz Mage
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LLC in another state taxes

Can I live in California and have an LLC in another state?

As a California resident, you are free to register the LLC for your online business in any state.

Can a Texas LLC do business in another state?

A corporation, LLC, LP or LLP cannot just transact business in states other than its home state. A corporation doing business in another state needs the other state's permission to transact business there.

What is the best state to set up a LLC?

Delaware. Some experts point to Delaware as the best state for setting up an LLC due to its business-friendly legal system.

Can a Florida LLC own property in another state?

– The Verdict. In a limited liability company (LLC), the company is a separated legal person from its owners (referred to as “members”). The legal entity itself has the same right to acquire property in another state as one of its individual members.

Can an LLC do business in multiple states?

Updated November 4, 2020: Can you incorporate in multiple states? No; although your corporation or limited liability company can register and do business in multiple states, you are only allowed to incorporate in one state.

Does California tax out of state LLC?

What if a corporation or a limited liability company (LLC) is formed in another state, like Delaware or Nevada, but does business in California? The out-of-state business entity (a “foreign” business entity) must register with the state, file tax returns, and (most important to the state) pay taxes to California.

Can you transfer LLC from one state to another?

When you move an LLC to another state, you may need to register with state and local taxing authorities. You may also need new business licenses, and you should update your address with everyone you do business with. Moving an LLC to a different state is often a simple process.

Can LLC members live in different states?

It also doesn't set geographical limitations for any of the partners. Therefore, there is still great flexibility in terms of the managing of a partnership with partners that reside in different states.

Does a single member LLC pay franchise tax in Texas?

Each taxable entity formed in Texas or doing business in Texas must file and pay franchise tax.

What is the cheapest state to have an LLC in?

What you Need to Know Before Forming your LLC. If we are just looking at the cost to form an LLC, Kentucky is going to be the cheapest state to form an LLC at $40 per LLC formation.

Which state has the lowest filing fee for an LLC?

Learn about LLC registration costs in your state in our LLC cost guides. Kentucky has the lowest LLC registration fee at $40 and Massachusetts has the highest LLC registration fee at $500.

Do Delaware LLC pay taxes?

A. Delaware treats a single-member “disregarded entity” as a sole proprietorship for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the State of Delaware.

Can a Texas LLC own property in Florida?

Your business will keep the same EIN, the same management structure, and own the same property deeds. The only change is that the Texas LLC is now considered to have been initially formed in Florida. However, you might need a new name if the Texas LLC's name is in use in Florida.

Can I start an LLC in Florida if I dont live there?

Anyone, anywhere in the world can form a business in Florida. There is no requirement that you must be a citizen of Florida to do business in the Sunshine State.

Can I open an LLC in Florida if I live in another state?


Why is Delaware the best state to form an LLC?

Delaware is the most popular state to file an LLC in because it has a strong reputation for being business-friendly and offers a fast filing process with increased protection for owners.

Can there be 2 LLCs with same name in different states?

When you're forming a corporation or an LLC in a state, the name must be unique to your business within that state. Others can form LLCs and businesses in other states that have the same name as yours. If you want to protect your business name across all states, you will need to trademark it.

Does an out of state LLC need to register in California?

California's LLC Act requires foreign LLCs to register with the state of California if they are transacting business within the state.

How do I avoid LLC tax in California?

Can I avoid the California Franchise Tax? There's no way for a registered business to legitimately avoid the California Franchise Tax. Sole proprietors and general partnerships don't have to pay the California Franchise Tax, but they also don't have any personal liability protection.

How do you avoid taxes with an LLC?

A general Corporation making a Subchapter “S” Election or an LLC with or without a Subchapter S Election pays no federal tax on its taxable income and no employment taxes on its distributions to stockholders.

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LLC in another state taxes

Comment by Aurelio Leavitt

i'm conducting business in texas in georgia but have a california llc uh so the question here is asking you know with an existing california llc do they also need a texas llc and a georgia llc in addition to the california llc first off i am not your lawyer i'm not your cpa i am just providing useful information that's uh factual as far as i know uh that you can google anywhere uh use me as a resource not your only resource it's not advice this is just a guy who owns a business formation service talking about questions that we get in the chat and in comments in other platforms uh so the answer to this question is kind of loaded here this is a really interesting one um first off as a reminder if you haven't watched the videos on uh there are deeper videos about llc's you need to know that an llc is a state entity not a federal entity so uh someone like amazon has their domestic llc in uh delaware and then they've got a foreign sorry they don't have an llc they're a corporation so let's use llc incorporation interchangeably here so go with me so amazon has a delaware corporation a domestic okay so the state of origin that you create your llc in sorry i'm gonna use corporation the state of origin that you create your corporation or llc in is the domestic state okay state of origin i formed my llc or corporation in delaware it is my domestic llc or corporation and then if i want to expand to texas and i want to have employees in texas i then need to create another llc or corporation in texas but that's not my state of origin delaware is where the home office the headquarters even if you actually headquarters another state the the corporation llc headquarters in the in the kind of the abstract mind of the llc is in delaware or the state of origin the state of domestication the domestic state uh the the any additional states that you form in are foreign so it's not domestic is in united states foreign is in france germany wherever it's all within the united states so the the domestic is the state that you originally formed in and the foreign states are every other state that you formed in so in this person's case if they were to go through with this their domestic llc would be in california and then they would form a foreign llc in texas and a foreign llc in georgia that is an option they don't necessarily need to do that different states have different rules california is really really hardcore and so if you have anybody working for you in california like they won't even let you perform business until you get that foreign llc or corporation file hard no on that um but it's a little like there's a lot of gray area loosey-goosey it's like well you know who's performing the work is it a um is it a contractor is the contractor have an llc in that state and you're just hiring the contractor in another state then kind of you don't need that right are you physically going to another state and doing work then maybe i mean if you are you doing a one-off job um if you're doing a one-off job and your insurance company says it's okay then you know why not right uh check with a check with an attorney on this um but you know if you're just doing like a one-off job or you know i'm in texas and i'm performing the work in texas for a wyoming company i'm still doing the work in texas um if you're doing one-off things like that i don't really think the government is going to really you know give a lot of cares about that it's when you're actually like performing real work for an extended period of time that they're gonna want their revenue okay so it's about taxes this is all about taxes and so if you're a texas llc sorry if you're a california if you're a california llc and you're going into texas for one job that's probably a gray area okay this probably something where you know texas is not going to lost my life um texas is not going to like go crazy about this it might be a technicality but like is texas going to come after you and like hold your feet to the fire i don't know i don't know about that um but if you're like performing work in texas and georgia on a regular basis and that is becoming a branch like a a home base for you and you're really expanding so like you've been successful in california doing tile work and now you're going to georgia and you're opening a store or you're doing recurring work in georgia and you're doing recurring work in texas then yes it does make sense to do that because texas and georgia are going to want their tax revenue all right not every state has tax revenue you know texas is a no income state uh for businesses delaware wyoming uh nevada the texas one is kind of loosey-goosey because like it's up to 1.127 million dollars over that then you have to like you know uh fill out a bunch of stuff and have expenses and whatever but if you're making a million dollars a year in texas there's no state income tax from there you still have income tax from the federal government but the state government not so it is really all about the state income taxes the states want the money that you make from within the state so again i don't quote me on this but if you're doing like a one-off job it's probably not that big of a deal the state's not gonna know they're not gonna come after you um what are they gonna do like go across state lines and drag you back probably not um and if it's if it's of a digital nature like you go you fly for a wedding and you take photos uh in another state and fly back you know like there's no way to track that so i i could be getting in trouble right now just for like the state governments are going to like watch this youtube video and be like we are holding you responsible for multi billions of dollars that these small businesses have you know accumulated and earned in our states and we didn't get the tax money so but that's on me not on you so anyway hopefully this has been helpful for you and a little bit entertaining uh but that's basically kind of how that works um you know again all you can always talk to a professional um and get you know deeper advice if you're worried about it um but that is kind of an overview um if you like the video like subscribe share with a friend go to and use us if you are doing this like this person could have actually you know bought these foreign llc's through us uh which would be cool so if you need domestication this is called domestic sorry that's not called domestication if you want this or you need domestication which is another thing we can help you with all of that so go to chat with us um and we'll be happy to have you as a customer until the next video

Thanks for your comment Aurelio Leavitt, have a nice day.
- Fritz Mage, Staff Member

Comment by istorietah

what's going on alex here and today i'm answering your tax questions from reddit and today's question has to do with whether you can minimize your taxes if you register your business in a different state let's take a look now this question comes from pursuing materialism and it reads as follows would like to start llc question around location i'm interested in starting an llc but live in california where the startup cost would be 900 plus dollars parents currently live in indiana is there any way i can register my llc in indiana or is this generally a bad idea a bit off topic assuming i don't register in indiana would my best approach be to start as a sole proprietor in ca and then shift to the llc once i have revenue interesting question and i can't tell you how many times i'm asked this question clients always believe that they are the first ones to think of something like this and that they're gonna completely pull a fast one on california in this case because california has high business taxes so firstly let's discuss what having an llc in california means california being wonderful as it is has an annual tax for llcs of 800 that means that if you did business with an llc whether you made a dollar or a thousand dollars you're gonna pay 800 just for the privilege of having a limited liability entity throughout the year on top of that there's also the annual llc fee which starts at an additional 900 and can go up from there depending on the gross receipts of the business so if you have gross receipts with an llc of let's say 300 000 you have the privilege of paying 800 plus 900 on top of it you have the tax and the fee all applicable one year you could be paying three to four thousand dollars to california every single year just for the privilege of operating the llc in the state so a common misconception that i hear all the time is clients say hey i'm going to register my llc in nevada or florida or texas or pick your state with no income tax and that's going to allow me to avoid taxation in california for my llc they believe the problem is that that is incorrect that you're not going to get ahead of this thing by registering your business in a different state because the deciding factor on whether the tax is applicable is whether the entity is doing business in california no matter where it's registered so even if it's a foreign llc foreign meaning outside the state of california so in any of the other states if it's registered in any other state it's a foreign llc it's still going to be subject to the 800 annual tax and 900 minimum fee if the grocery seats reach certain levels and so on and so forth so you may very well register the llc in florida if you're doing business in california welcome to those taxes all right so in many ways it's the same as if you would have registered the llc in california but what happens is when you're registered in a different state now that state may have its own filing requirements so on an annual basis you need to pay a fee maybe and submit some kind of report statement and you're handling that for the other state now in california when you start doing business here you need to register as a foreign llc so there's of course fees and papers that need to be filed for that plus on an annual basis you need to make sure you file the proper tax return for the llc itself okay so you might be filing form 568 or what have you and that is a situation that is going to be applicable if you try to skirt the california taxes this is not the first time people have thought of this people think of this all the time but the states are privy to this and they're gonna tax you on where the income is earned meaning that if you're doing business if you're managing the entity from california another way to look at it is if it's an llc that's earning money because you're earning the money being in side of the state of california then you're going to be subject to those same taxes so you may save yourself on paperwork and filing fees if you just go ahead and file the entity in california bite the bullet pay the taxes and just deal with it because i can tell you that california and new york i believe are in a competition to see which state is most vicious in terms of tax collection and california is no slouch in this regard all right they will find you they'll they'll make your life not so happy so definitely want to make sure that you don't fall under this misconception that you can magically avoid california taxes by registering out of state and all this other nonsense and i've even read some websites that allude to this but it's a misconception now with that said from a legal perspective this is outside of the tax side from a legal perspective it may make a difference where you register your entity different states have different protections for entities depending on the laws of that particular state now you have to discuss that with an attorney i'm not an attorney i can't provide legal advice but my understanding is that delaware for example has some friendly provisions towards some businesses and a lot of businesses are registered in delaware does that make sense for your particular business again you have to discuss the legal side with an attorney see if there's pros and cons that are applicable to you then you sort out the tax issues and see what's most advantageous there but you don't want to confuse the legal and the tax aspects by allowing the tax tail to wag the dog if you will so for me if i'm registering an entity first i want to know about the legal protections and if it makes sense for me to register in delaware and do business in california so be it but i'd need to register that delaware entity as a foreign llc in california and pay the applicable taxes if i'm doing business that's just the name of the game and let's see if we could address some of these other questions now parents currently live in indiana is there any way i can register melissa in indiana or is this generally a bad idea i think i covered that pretty substantially a bit off topic assuming i shouldn't register in indiana what's the best approach to start as a sole proprietor in california and shift to lsu once i have revenue essentially you can either start as a sole proprietor and then you can put in place the llc when you have some traction that's certainly an idea but again you have to take into account that you're going to be operating a business without that limited liability protection that may exist again an attorney would be able to advise you on that but it's up to you if you don't feel that there are significant risks after consulting with an attorney then you may consider operating your business without the llc first and then getting the llc once you have some traction the other approach would be to have an llc from day one and again there's the legal side that you need to consider consult with an attorney and the tax side that you need to take into account because it is expensive to start a business in california all right so hopefully pursuing materialism you're also a fan of pursuing knowledge and that is the idea of these v

Thanks istorietah your participation is very much appreciated
- Fritz Mage

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