State Income Tax A summary of the basis of State income tax.

State Income Tax Rates For 2010 A table showing the rates of state income tax for 2010.

Business Activity Taxes Some states attempt to tax out-of-state corporations on their in-state sales.

Nevada

As in all states, Nevada LLCs, 'S' Corporations and Trusts have the tax advantages established by federal law and described on our Forms of Company page. Nevada has a zero rate of state income tax.

There are however some additional advantages of Nevada incorporation, including:

• Tight protection against 'piercing of the corporate veil'. In order to attack the foreign (ie out-of-state) owner of a Nevada corporation, a claimant must prove that the corporation is influenced and governed by the person asserted to be the 'alter ego', and that there is such unity of interest and ownership that one is inseparable from the other, and that adherence to the corporate fiction of a separate entity would, under the circumstances, sanction fraud or promote injustice. In more than 2 decades, the courts have only once backed a claimant, and that was in a case of outright fraud committed in Nevada itself.

• Corporate officers and directors can be indemnified. Under a 1987 law, corporations are allowed to place provisions in their articles of incorporation that eliminate the personal liability of officers and directors to the stockholders of Nevada corporations. Although Delaware and some other states soon adopted similar laws, Nevada's law remains as strong as any. In addition, the Nevada Corporation Code allows for the indemnification of all officers, directors, employees, stockholders, or agents of a corporation for all actions that they take on behalf of the corporation that they had reasonable cause to believe was legal.

• Joint and several liability has been abolished in Nevada in damage litigation. Nevada now requires the court to assign a percentage of fault to each defendant, from zero to one hundred with the total equal to 100 percent. Every defendant found liable is required to pay a share of the total judgment no greater than his/her fault.
  
• Nevada's corporate law is particularly favourable to rights of small corporations. For instance, under Nevada law officers and directors are protected in cases of acts or omissions committed in good faith, officers are exempt from monetary damages, directors cannot be attacked for breach of a director's duty of loyalty, and both officers and directors are permitted to undertake transactions involving undisclosed personal benefit to the officer or director. Delaware law is considerably less favourable.

Given the combination of legal benefits offered under Nevada law, large numbers of large and small US and foreign corporations choose Nevada incorporation even if their business activities are going to take place in other states. Citibank is an example.

State Income Tax A summary of the basis of State income tax.

State Income Tax Rates For 2010 A table showing the rates of state income tax for 2010.

Business Activity Taxes Some states attempt to tax out-of-state corporations on their in-state sales.