No taxes with Nevada corporations, right?

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On an hourly basis southern californians are bombarded with radio ads extolling the virtues of Nevada corporations. One of the bigger benefits claimed is tax free nature of Nevada.

I guess it really comes down to the definition of what is a tax. I say this as right now the governor of Nevada is pushing through a bill that is going to increase the business license fee that Nevada businesses need to pay annually. Keep in mind this isn’t a tax, instead it is a business licensing fee.

If you are really bored and want to read the text of the new Nevada business license fee, here it is. Quite honestly I got a distracted after about page 30 or so. In its entirety it runs over 160 pages. Apparently the old fee of $200 a year is going to be replaced with a fee on the gross income of the business, with over 27 different categories of the fee, based upon what type of business it is.

Forget tax simplification, Nevada is going to need fee simplification.

My kids love to tell me they read on the internet about Abraham Lincoln saying you can’t believe everything you read on the internet. I think the same thing holds true when you hear about all the wonderful benefits of a Nevada corporation. For 95% of you there isn’t going to be a benefit.