How to Start a Business in The USA by MyUSACorporation - HTML preview

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Make sure to read the full article for a better understanding of how sales and income taxes work. It is recommended to hire CPA to handle the question of taxation.

 

Payroll Taxes:

 

Payroll taxes become relevant if your company starts hiring regular employees in the U.S. Keep in mind, contractors are a different kind of employees, who file their own income and self employment taxes. So unless you plan to open a physical office and hire employees who will be working regular hours in that office, you will not need to worry about payroll taxes.

 

Franchise Tax:

 

Franchise tax is another way for the state to cash in on the fact that your company is registered there. Only few states have franchise taxes, and in a way they are just another way you maintain your company in good standing, similar to annual reports and such.

 

Two most notable states that levy franchise tax are Delaware (as of this writing it's $300 a year for LLC, for corporations it's calculated based on number of shares and par value) and California (as of this writing it's minimum $800 a year for LLC and corporations). Typically, the state and/or your Registered Agent will remind you when this tax is due.

 

Gross Receipts Tax:

 

Gross receipts tax is levied in a few states and on some entity types. For example, Texas has annual gross receipts tax. Your CPA will be able to assist you with the calculation of this tax, if your entity is required to file one.

 

Various Specialty Taxes:

 

For most part you wouldn't worry about those, as they are specific to certain activities, and often are related to companies with physical presence in the state. Some taxes you should be aware of are taxes levied on products containing tobacco or alcohol, in which case they require licensing and compliance.

 

What state should I register my company in?

U.S. companies are registered by states and territories, not by the federal government. That means theoretically you have 50 states, DC and several U.S. territories to choose from.

 

Each state is different - different laws, registration fees, processing times, and renewal rules and costs. When making the choice of state you need to answer a few questions first.