What are the franchise and business income taxes for a one man S Corporation for the following states: California, Texas, Florida and Nevada? I want to move out of California because of the taxes.

ANSWER

The BIDaWIZ Team's Answer:

You should note that taxes shouldn't be the sole factor when deciding to move your business to another state. State specific laws and financial opportunities should be significantly considered. However, generally Texas and Nevada are more tax favorable states to do business for a pass-through entity such as a S Corporation. Please note that there isn't a franchise tax in Nevada, while there is a minor one in Texas of around 1% of revenue. However, if your gross revenue is less than $1.03 million annually, the franchise tax in Texas is waived. In Nevada there is a quarterly modified business tax (MBT) that is imposed as an excise tax on Nevada employers. Specifically, the rate for any taxable wages for any General Business employer above $62,500 per calendar quarter is 1.17%, after health care deductions. The MBT is eliminated for any General Business employer with $62,500 or less in taxable wages per calendar quarter, after health care deductions. We know you don't currently have employees, but this is a consideration for the future.