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I am new to US Tax law and have a unique situation.

I want to establish a USA LLC, perhaps Nevada or Delaware with a UK bank account I will be emigrating from the UK to live in Washington State(no personal income tax) Initially income into NewCo LCC will come from the UK for services provided to UK residents. I will draw my income from NewCo UK sterling bank account and transfer it to my US Dollar bank account.

Is there any benefit establishing my LLC in Nevada with no Corp tax whilst living in Washington which has no income tax? What will be the effect once I start trading in Washington and other states?

thanks for any advice.

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4 Answers

up vote 4 down vote

You should talk to an accountant. You have some fantasies about tax avoidance that can be cleared up in a 20 minute conversation.

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up vote 1 down vote

Remember that as a non-US citizen you are subject to federal income tax witholding requirements. Even though you are likely to get a full refund, the company may be legally obligated to withhold a portion of your income for part of the tax year. You are also still obligated to submit the appropriate filings even if you have zero tax liability.

See: http://blink.ucsd.edu/finance/payroll/foreign/index.html

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up vote 0 down vote

First, if I were you I would check with an accountant, however I can tell you a little about the tax situation in the state of Washington. While it's true they have no personal income tax, they do have a Business and Occupation (B&O) tax. They collect the B&O tax based on your sales, not your profits. You pay it even if you lose money. I was a resident of Washington for most of my life, but moved to Georgia several years ago.

Talk to an accountant.

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Does Washington tax a resident on out of state business revenue? If so maybe I should consider Oregon. I'm looking at both Portland and Vancouver,WA as places to live. – Rob Mar 29 '10 at 14:13
Yes, if the company is domiciled in Washington, they charge B&O tax on all income. Of course they have exceptions for Microsoft, Boeing and a couple of other companies. :( – Jim Blizard Mar 30 '10 at 1:55
Can you elaborate on MS, Boeing etc? – Henry the Hengineer Jul 24 '10 at 15:56
up vote 0 down vote

The LLC doesn't pay corporate tax anyway- that's why people set up LLCs (among other reasons). The LLC distributes money to you, and then you pay tax on your personal tax return. Why not thus set the LLC up in Washington, where you'll be living anyway?

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