Nevada has no state personal income tax. It has no corporate income or franchise tax tax either. On the other hand, neighboring California has the highest personal tax rates in the country. It also has one of the 10 highest corporate income tax rates. It’s no wonder that businesses and individuals leave the Golden State for Nevada, Florida, Texas or Wyoming that have no state income taxes. Toyota, Oracle, HP, Uber, Airbnb, and Twitter have relocated their headquarters to Texas and Florida. Wealthy individuals like Elon Musk and Larry Ellison are also leaving the tax-and-spend state of California. It’s our politicians, of course, but I wonder who placed them there. Let’s discuss Nevada taxation for now.
So why are large corporations and wealthy individuals relocating to Nevada?
- No state personal income tax.
- No corporate income tax or franchise tax.
- No information-sharing agreement with the IRS.
- Officers and directors are protected from personal liability for lawful acts of the corporation.
- Low annual fees and minimal reporting and disclosure requirements.
- Stockholders, directors, and officers are not public record.
- They are not required to reside or hold meetings in Nevada.
- They are not required to be US citizens.
- Directors are not required to hold stock.
- Corporations may purchase, hold, sell, or transfer shares of its own stock.
- Corporations may issue stock for capital, services, personal property, or real estate.
- Directors may determine the value of any transactions and their decision is final once determined.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation.
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He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to [email protected].