Nevada is widely regarded as one of the best places to start a business because of the way the state handles taxes. The main draw for entrepreneurs is the fact that the Sagebrush State has virtually no state-level taxes beyond the state’s modified business tax and sales tax.
Nevada is one of seven states (along with Alaska, Florida, South Dakota, Texas, Washington, and Wyoming) that does not require citizens to pay traditional state income taxes, and business owners are also free from corporate income taxes and franchise taxes on income but may have to pay a modified business tax. If they do not, only businesses that make more than $4 million in gross revenue are required to file a commerce tax return, and some small businesses thrive without ever reaching that level of income.
Of course, business owners are still subject to federal taxes, and those that reside out of state may have to pay some additional state taxes, but Nevada strives to make starting a business easy, from the paperwork to the filing process. If you’re wondering how to start a business in Nevada, this guide can help.
Benefits of Opening a Business in Nevada
According to the Nevada Secretary of State’s office, the Silver State has a clear advantage to business owners, with no corporate income taxes, franchise taxes, or personal income taxes beyond the modified business tax. As is true with most places, if you decide to launch a Nevada corporation, you don’t have to pay state taxes on corporate shares, and you’re free to purchase, hold, sell, or transfer shares of your own stock.
Nevada limits business costs at every turn, from competitive sales and property tax rates to a minimal employer payroll tax of 0.7% of gross wages, with deductions for employer-paid health insurance. Nevada has also developed a model similar to Delaware that limits the cost, time, and risk of commercial litigation.
How to Start a Business in Nevada Checklist
Whether you’re starting a new business in Las Vegas, Henderson, Reno, Sparks, or any other city or town in Nevada, the business formation process is similar to starting a business in any state. The main difference is that it requires a little less paperwork depending on the business structure.
Most of what you need to get started are available through the state’s SilverFlume business portal, and it even allows online filing in many cases. For example, small business owners of a Chapter 86 limited liability company (LLC) can file their articles of organization online.
Before you even start looking to file formation documents, there’s some legwork to do. This list of steps of how to launch your startup will point you in the right direction.
1. Create a Business Plan
Creating a business plan does more than simply organize your thoughts, because it helps on the funding side, too. Solid business plans attract investors and can help you secure a loan, whether it’s through a bank or the Small Business Administration (SBA). It can also help you land a qualifying grant.
Since most businesses aren’t typically profitable off the bat, your business plan should help you map out a path to financial stability. You may want to include things like:
- A clarification of your business idea
- A competitive analysis, so you can see how like-minded businesses function and figure out what unique thing you’re bringing to the table.
- An overview of your business goals: How much income do you plan to make? What problem are you looking to solve?
- Potential issues that may arise through the course of business and a plan to solve them. For example, what happens if you lose a supplier? What happens if your manufacturing is delayed?
- A market analysis to help you understand your target consumer and how best to serve them
- An overview of your finances and projected profits: When do you expect to be profitable?
In addition, you may want to check for qualifying tax breaks and grants within Nevada. Though these are typically awarded to nonprofits and research-based startups, this isn’t always the case. You can view our complete guide to writing a business plan for more information.
2. Choose a Business Structure
While there aren’t many Nevada taxes and you may have certain exemptions per the Nevada Department of Taxation, you still need to choose a business structure to pay the IRS and obtain a Nevada state business license. Some businesses choose to incorporate or file for nonprofit status, but one of the most popular business structures remains the limited liability company (LLC).
Despite the paperwork, a Nevada LLC is favorable because it avoids the so-called double taxation of corporations. In other words, your business’s income passes through to your personal return rather than having profits also taxed on a corporate level. The main draw, however, is that this structure offers limited liability protection on personal assets. This structure also can enjoy some privacy. Owner names do not need to be listed on official state filings as long as you have all-member managers, but they do need to be within an operating agreement if your LLC chooses to have one. You can file for an LLC online, and it’s a rather speedy process, but there are fees that range from $75 for the primary fee to and as much as $350 for all the associated optional LLC fees.
Sole proprietorships have the least amount of paperwork. In fact, if someone has numerous sole proprietorships in Nevada, they’re only required to get one Nevada state business license rather than a license for each separate business they run. Many business owners who opt for this structure file for a DBA (doing business as) name and use a fictitious firm name rather than their own personal legal name.
To limit paperwork, they can even opt to use their Social Security number on tax forms rather than an employer identification number (EIN) or tax ID number (TIN), though this is not recommended because of potential identity theft. Also — and this is an important thing to keep in mind — sole proprietorships do not have the same liability protection as LLCs.
3. Determine Your Business Costs
Before you can launch your small business, you need to make sure that you have enough funding. To do this, you’ll have to determine your business costs by adding up your fixed expenses (like mortgage or rent and insurance premiums) with projected variable expenses (like sales taxes or use taxes and manufacturing costs). You’ll also need to include one-time costs, like filing fees and equipment purchases. Remember to add a financial cushion just in case of an emergency.
Most business owners don’t have startup funding hanging around in their bank accounts. In this case, you’ll need to raise the funds, but you can do this in a number of ways. For small purchases, business owners may want to use a low or no-APR business credit card. For larger expenses, most small companies opt for a business loan.
Business loans can be procured through a bank or the SBA. The SBA has a number of funding resources available and can even help you find an outside investor or grant. Nevada also makes finding qualifying grants simple. The Office of Grant Procurement, Coordination, and Management have a massive listserv on their website, as well as links to federal government resources.
4. Create a Business Name
Whether you’re using a DBA or not, it’s important to choose a great business name. This is how your consumers will know you, so it must be simple enough to be easily recognized on social media but unique enough that you don’t struggle to obtain a domain name.
It’s important to make sure that your business name isn’t already taken, so search Nevada’s business registrations before you commit to avoid any legal repercussions. You can reserve your business name online through Nevada’s business portal.
5. Register Your Business and Open Your Accounts
The final step before launching your startup is registering your business accounts. Most of the paperwork, like LLC filing and obtaining a general business license, can be done through Nevada’s SilverFlume business portal, though specialized licensing generally must be done through the license’s associated agency. In addition to obtaining a state business license and registering as a business entity, consider the following:
- Open a business bank account
- Obtain a business credit card
- Check your Nevada business address’s local zoning license requirements
- Get specialized business licenses (for example, do you need a food or liquor license for your business?)
- Get the proper insurance
- File for an EIN with the IRS
- As far as insurance goes, most businesses need general liability insurance, but there are also specialized insurances that may be required. Before you hire full-time or part-time employees, you will have to pay into workers’ compensation insurance and unemployment insurance. These are not required for independent contractors.
- In addition, corporations and nonprofit corporations will have to file articles of incorporation with the Nevada Secretary of State before they can register their business entity. Anything that needs to be notarized can be done by the county clerk.
6. Market Your Nevada Business
Anyone can launch a business in Nevada, but without a solid marketing plan, people won’t know that it exists. To reach customers, create a comprehensive social media strategy across all major platforms like Facebook, Instagram, LinkedIn, and Twitter. You may also want to register your business on platforms like Yelp, Google My Business, and local directories. In addition, a full-fledged search-engine-optimized (SEO) plan for your website can make your business easier to find online.
Examples of Good Businesses to Start in Nevada
Though there are a limited number of business structures, there are few limits to the actual type of business you can start in Nevada. If you’re opting for a sole proprietorship, you’ll probably want to have a smaller, one-person operation. These often include businesses like freelance writing or photography and craft making.
LLCs have a much larger range and can expand to retail, food and beverage, business to business (B2B), and more. The options are limitless, and if you don’t know where to start, franchising is always an option.
Nevada is one of the best places to start a business in the U.S. It allows for a unique level of privacy and has a number of unbeatable tax advantages regardless of the type of business. Plus, Nevada’s business portal can guide you through the whole process, and you can easily file for an LLC online.
Start Your Business in Nevada FAQs
How much does it cost to start an LLC in Nevada?
At minimum, fees for Nevada LLCs range from $75 for the primary LLC filing fee to as much as $350 for other associated optional LLC fees and the $200 cost of a state business license.
What is a good city to start a business in Nevada?
Reno and Las Vegas are among the most populated cities in Nevada, so those are great places to start your search.
What business and tax regulations are compulsory for an LLC business in Nevada?
Nevada’s Department of Business and Industry can guide you with some state business and tax regulations, but you’re still subject to federal tax law. It’s best to consult an attorney for a full picture.
Popular States to Start a Small Business
How to Start a Business in Florida
How to Start a Business in Illinois
How to Start a Business in Iowa
How to Start a Business in Maine
How to Start a Business in Michigan
How to Start a Business in Montana
How to Start a Business in Texas
How to Start a Business in New York
How to Start a Business in North Carolina
How to Start a Business In California