Mark Kohler advises a Delaware LLC doing construction in Pennsylvania and owned by a California resident to domesticate into a Pennsylvania LLC. The business owes Pennsylvania taxes on income earned there, plus California's $800 minimum franchise tax if the owner manages it. A quick consultation with his firm can save money in year one.
Chapters
Maria says, I opened an LLC in Delaware. The construction work happens in Pennsylvania and I live in California. Where do I file? Well, Maria, I feel bad because at our law firm we would have never recommended that some bozo recommended Delaware for a small business owner. Setting up in Delaware or Nevada before you go out and start a small business in Pennsylvania when you live in California is a scam. It's worthless and I don't care. Anybody wants to go head to head with me on that, I'll debate it all day long. What I would do, Maria, is I would convert your Delaware LLC to a Pennsylvania LLC. It's called Articles of Domestication. Call Susan Co. In my office. Get rid of the Delaware garbage. You don't need it now. Delaware is great, but not in your situation. Then you're going to, because you're in Pennsylvania doing the work, you're going to have to file taxes in Pennsylvania on the money you earn in Pennsylvania. You want your LLC registered in Pennsylvania and domesticate the Delaware one with California. You're going to have. If you're a manager of the llc, you're going to have to at least pay the minimum franchise tax of $800. I've got articles on that, by the way. Get a consult with one of the attorneys in my office and let's clean it up. By the time you pay them for an hour, you're going to save that alone in the first year.
