Comparing Nevada and Hawaii LLC: Which State is Right for You?

Location is everything when incorporating a business. It determines your company's chances of surviving or going into bankruptcy and gives you an idea of the costs of running your startup.

There are advantages and disadvantages of incorporating a business in every state. If you want to guarantee flying colors, you must do your best to find a working environment that supports your success.

Determining which state is best for startups is challenging, but we’re here to give you a brief overview. We’ve compared the benefits of starting an LLC in Hawaii and Nevada.

Know what makes the Silver state the most pro-business location in the country with our quick guide.

Can’t decide between incorporating your business in Nevada or Hawaii? Before making your decision, here are some key points to know:

Personal Income Tax

Hawaii has among the highest individual income taxes in the country at 11%. In fact, it’s ranked second, just behind California. Owning an LLC in Hawaii will require you to pay self-employment taxes.

Because of this, you may want to consider starting your business in Nevada instead, as you won’t be required to pay personal income tax. However, you’ll still find yourself paying taxes if your LLC does business outside Nevada, in which you’ll be subjected to that specific state's taxation laws.

Hawaii’s Taxes

Hawaii still imposes major fees on unitary and estate liabilities. However, like Nevada, the state doesn’t require tax on different financial levies.

Nevada and Hawaii don’t impose franchise taxes. This means that unless your business is a C corporation, your venture will not be subjected to paying state fees on income or net worth. However, if a portion of your business profit flows into your personal income, it will be taxable at 11%.

Hawaii has no gift tax, provided the total amount doesn’t exceed $16,000. Any value beyond that amount must be reported to the IRS. Moreover, it will decrease your lifetime gift tax exemption by $12.06 million.

No Recognition for Series LLCs

Series LLCs are limited liability companies that allow you to gather your venture’s assets, membership interests, and operations into various independent entities, providing full liability protection.

The assets of one series are not at risk from the liabilities of other series within the same series LLC.

Let’s say you own multiple rental properties, and one of them is sued by a tenant. In this case, you have fewer problems to worry about, as the rest of your properties in the series won’t be affected. It’s a clever solution to protect your personal property.

However, Hawaii doesn’t recognize series LLCs. There is no guarantee that this will change in the foreseeable future.

Want to Know More? Speak With Nevada's Best LLC & Business Formation Company.

NCH can give you the best asset and lawsuit protection in Nevada. As Nevada’s leading business formation services provider, we help kickstart your business by providing all the support you need from start to finish. Moreover, we’ll help you decide whether to incorporate your LLC in Nevada or Hawaii.

NCH also has various business formation services to help make the incorporation process much easier. We’ll assist you in acquiring a business license and finding a registered agent to manage your legal documents.

Additionally, NCH also has private consultations on taxes and other legal services. Our in-house experts will guide you through developing effective strategies to minimize your tax liabilities and preserve your wealth.

Incorporate your venture in Nevada and unleash its full potential today!