If i want to start an online business, should I incorporate in the state having better tax benefits?
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If i want to start an online business, should I incorporate in the state having better tax benefits?
Many people rave about great tax benefits of incorporating in WY. I live in HI and I’m planing to start an online business selling merchandise via amazon. What’s the best place to incorporate to reduce tax obligations? I heard about Puerto Rico 20/22 but do not want to live there. Is it possible to live in HI and still reduce tax obligations?
Asked on March 2, 2018 under Business Law, Hawaii
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
The taxes your business pays are based on where it is physically located and where it conducts business, not where it is incorporated: e.g. if your online business is located out of your home in HI (that's where your office is; where most work is done), you will pay HI taxes. The place you incorporate does not affect liability. To have WY taxes, you'd need to locate in WY; having seen both HI and WY, moving from HI to WY might be too high a price to pay.
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