I plan on creating a “nexus” (bank account, registered agent, phone# in directory etc) in Wyoming and receive and ship products out of my apartment in Virginia.
I will be selling my products via Amazon.com, ebay, and my own website and ship them out of my apartment in virginia.
What taxes would I have to pay in virginia if I receive all money through my business bank account in Wyoming? And what would save me the most money? incorporating a LLC or a S Corp.
Thank you in advance!
First of all, let me explain the concept of “nexus”. If your company meets certain conditions it creates “nexus”, meaning a connection, to a certain state. Sometimes it means that your company has to charge sales tax in that state, but doesn’t need to register with the Secretary of State or other authority that registers businesses in that state. Other times the connection is strong enough to require such registration.
You automatically create nexus in the state where you form your company. You also create nexus in the state where you physically conduct business, so in your case you might as well form your company in Virginia and avoid the hassle of registering first in Wyoming and then registering as a foreign entity in Virginia, and then maintaining both entities.
Keep in mind – if you will sell through Amazon you should research with this company what would be the requirements in terms of collecting sales tax, since this company has nexus in many states, and if you use its fulfillment services you might be in a position of establishing nexus in some of those states. To learn more I invite you to read my answer to Form a LLC for online business using Amazon FBA.
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