Wyoming is known as one of the most business-friendly states in the US. As a non-resident businessperson, what are your tax responsibilities if you decide to do business in Wyoming?
It can be difficult when starting a US business to know if you have any additional responsibilities when incorporating within a certain state.
The IRS is a big obstacle, as are various state organizations. It’s why you must be careful in high regulation places like California.
So why is Wyoming a great idea for you?
- No need to worry about high taxes.
- Residency issues don’t have to be considered.
- Ease of incorporation
I always recommend that you hire a professional business lawyer like me to help you out with things.
Send me an email at firstname.lastname@example.org today for more information on how you can begin incorporating in Wyoming.
Which Wyoming Taxes Do You Need to Worry About?
Wyoming is one of the friendliest states when it comes to taxes, or the lack thereof. Most of the taxes you would have to worry about in other states aren’t a factor here.
Here are just some of the taxes that you’ll never have to pay when you operate in Wyoming:
- Corporate tax.
- Personal income tax.
- Franchise tax.
- Officer filing fees.
- Fees for business licensing.
For the average business, this is one of the most cost-effective states for the non-US resident. Your ongoing costs could be just a few hundred dollars every single year.
And in return you’re also getting strong liability protections and good privacy laws, if you want to hide your name and address from the public record through an anonymous LLC.
So Why are these Wyoming Taxes Only Good for Non-US Residents?
You may be wondering why I’m primarily recommending Wyoming to non-US residents. The reason for this is that US residents are liable for taxes in their home state if they incorporate in Wyoming.
For example, if you decide to incorporate in Wyoming as a US resident but you do live in California, New York, or any other state your company will be considered a foreign entity.
That means you’ll have to pay a second set of fees. Your Wyoming LLC can’t just turn up and start doing business, so most of your savings are already being reversed.
An online company with a non-US resident doesn’t have to play by these rules.
On a side note, remember that Wyoming is the most sparsely populated state in the country, so few US residents are actually going to be doing business in the state.
It’s why states like Delaware are more likely to be recommended by professional business lawyers like me.
Are You Eligible for Any Wyoming Taxes?
The answer is yes. The two primary taxes businesses need to worry about in Wyoming are property tax and sales tax.
If you don’t own a property and you’ve chosen Wyoming as the best state to incorporate an online business in, you won’t own a property and so this is a non-factor.
However, Wyoming does have a 4% sales tax on various goods and services sold by Wyoming businesses. Local areas may also impose additional sales taxes, which can be added onto the overall state sales taxes.
This usually doesn’t deter many entrepreneurs and it’s simply the cost of doing business. Wyoming considers it to be a worthwhile sacrifice to encourage more businesses into incorporating in the state.
If this has convinced you to start a business in Wyoming, get in touch with me at email@example.com and I can help you start the process.
What about Wyoming Taxes and the IRS?
The IRS and the State of Wyoming are two different things. Non-US residents must still consider any taxes they have to pay to the Federal government.
The amount you pay to the Federal government depends entirely on the country you come from. The US has many tax treaties with countries all over the world to prevent the dreaded withholding tax.
But before we go into that I’m going to go into detail on how this works.
30% of your US income will be taken as tax by the IRS. This is known as the withholding tax and you’ll need to file Form 1040-NR to get it back.
If the actual taxable amount is under the 30% taken, you’ll be refunded the relevant amount.
Does this sound complicated?
It doesn’t have to be for all nationalities. For example, UK citizens have a tax treaty with the US.
Income sourced from the US will be taxed on the UK side only. The actual amount of tax you pay to the Federal government when selling to the US market is 0%. You pay the relevant amount of tax on the UK side instead.
That doesn’t mean that you don’t still pay state taxes, though.
For more information about this, you need to contact a professional business lawyer like me. Some nationalities are more difficult than others when it comes to this.
So are Wyoming Taxes Different for Non-US Residents?
After reading this you’ll be glad to know that there are few differences between what US residents must pay and what foreigners must pay.
The main differences are when it comes down to residency issues. These will influence how much tax you pay and the state you’ll want to incorporate your LLC in when the time comes.
For foreigners who don’t have to worry about residency issues, who are typically running an online business, Wyoming is a strong candidate for those who don’t want to pay a large amount of money to do business in the country.
Wyoming taxes don’t have to be complicated. This state offers one of the simplest tax systems for both online businesses and non-US citizens who want to operate in the country.
But there are responsibilities you need to consider. That’s why you should get a professional business lawyer on your side who can act in your best interests.
I can help you with that by giving you a free consultation.
Email me at firstname.lastname@example.org and let’s get started today!
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