Nevada LLC: S corp or C corp?

Nevada at a glance

What is different about Nevada?

Nevada is the outlier in this group because the taxes you plan around do not look at profit. The Governor's Office of Economic Development lists no corporate income tax and no personal income tax. What you pay instead: a $200 state business license renewal each year, a Modified Business Tax of 1.17% on wages for most employers (the first $50,000 stays non-taxable), and a commerce tax once your Nevada gross revenue passes $4,000,000 a year. Below that line you file nothing. Above it the rate runs from 0.051% to 0.331% of the revenue over the line, depending on your industry. None of these change between S and C, so an S election in Nevada is mostly about federal tax.

Does Nevada recognize a federal S corp election?

Nevada has no corporate income tax, so an S corporation pays no state income tax at the entity level, and its owners owe no Nevada personal income tax either. There is no state S election form to file. What does apply is the same for every entity type: the $200 business license renewal, the payroll-based Modified Business Tax at 1.17% for most employers, and the commerce tax only above $4,000,000 of Nevada gross revenue. The S election changes your federal bill, not your Nevada one.

Does my LLC need a separate Nevada election or form?

Nevada has no corporate income tax, so there is no state S election or S corporation income tax return.²

What does Nevada tax an S corp or LLC at the entity level?

• Nevada has no corporate income tax, so an S corporation pays no state income tax at the entity level.³
• A Nevada LLC pays a $200 state business license renewal fee every year.⁵
• Nevada's commerce tax applies only when Nevada gross revenue is above $4,000,000 a year; below that you file nothing.⁷
• The rate is 0.051% to 0.331% of Nevada gross revenue above $4,000,000, depending on the industry.⁸
• Nevada's payroll tax is 1.17% of wages for most employers, after the first $50,000 each quarter is exempt.⁹

Is a Nevada LLC taxed as a C corp ever better?

Nevada has no corporate income tax, so a C corporation pays no state tax on profit. It pays the same $200 business license renewal, the same 1.17% payroll tax on wages after the first $50,000, and the same commerce tax above $4,000,000 of Nevada gross revenue as an LLC or S corporation. The C corporation cost here is federal: the corporate layer, then tax again on dividends.

Run your Nevada numbers

In Nevada the state takes nothing from profit under either choice, so the S election pays or not on federal numbers alone: payroll tax saved on profit taken as distributions against the cost of paying yourself a reasonable salary. Nevada's 1.17% payroll tax applies to the wages you pay yourself, which trims that saving slightly.

How much would a Nevada LLC owner save as an S corp?

Assumes a 60% salary¹¹ and a single filer. Income tax is left out. C corp dividends are taxed again. Nevada's $200 business license fee is the same in all three, so it is left out.

When is the Form 2553 deadline for a Nevada LLC, and what if I miss it?

Late relief: federal steps, deadline guide.

What to do next

More on Nevada: How to start a Nevada LLC · How to start a Nevada corporation · Nevada LLC cost · Nevada annual report · Annual report late fees by state

Common questions