Nevada vs Texas: Side-by-Side Comparison
Here's a comprehensive comparison of the two states across all key factors for non-resident LLC formation:
| Feature | Nevada | Texas |
|---|---|---|
| Income Tax | None | None |
| Corporate Tax | None | None (margin tax >$2.47M) |
| Sales Tax | 6.85% | 6.25% |
| Annual Fee | $350 | $0 (most LLCs) |
| Formation Fee | $75 | $300 |
| Privacy | No member disclosure, no IRS sharing | Member names public |
| Court System | Standard state courts | Standard state courts |
| Asset Protection | Strong | Moderate |
| Best For | Privacy-focused entities | US operations, large market access |
Tax Comparison
Nevada Taxes
- Personal Income Tax: None
- Corporate Tax: None
- Sales Tax: 6.85%
Texas Taxes
- Personal Income Tax: None
- Corporate Tax: None (margin tax >$2.47M)
- Sales Tax: 6.25%
For non-resident entrepreneurs with single-member LLCs treated as disregarded entities, state income tax typically only applies if you have income sourced within that state. If you have no in-state operations, employees, or customers, state income tax may not apply regardless of which state you form in.
Formation & Annual Costs
| Cost | Nevada | Texas |
|---|---|---|
| Formation Fee | $75 | $300 |
| Annual Fee | $350 | $0 (most LLCs) |
| Registered Agent (est.) | $100–$300/year | $100–$300/year |
| Estimated Year 1 Total | $575 (with RA) | $450 (with RA) |
Privacy & Asset Protection
Nevada
- Privacy: No member disclosure, no IRS sharing
- Asset Protection: Strong
- Court System: Standard state courts
Texas
- Privacy: Member names public
- Asset Protection: Moderate
- Court System: Standard state courts
The Verdict: Nevada or Texas?
Both have no income tax. Texas has zero annual fees for most LLCs but less privacy. Nevada offers more privacy (no IRS info sharing) but costs $350/year. Texas has the larger economy and makes sense for businesses with US operations. Nevada is better for privacy-focused entities with no Texas operations. For cost-conscious entrepreneurs, consider Wyoming instead of either.
Our Recommendation
Texas for cost and US operations; Nevada for privacy
Remember that regardless of which state you form your LLC in, your federal tax obligations remain the same. All foreign-owned single-member LLCs must file Form 5472 and a pro forma Form 1120 annually, with a $25,000 penalty for non-compliance.
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