MD resident creates WY LLC

Client in MD created a WY LLC in 2019. He has not used it and does not intend to use it.

WY seems clear that there is no income tax filing requirement.

I wonder if the LLC has been registered in MD, but that is a legal issue. I don't see any MD tax filing requirement.

I want to make sure I am not missing anything. For example, in CA, if you form an LLC or the LLC is registered in CA, you have to file Form 568 and pay $800, even if the LLC has no activity.

Thanks for any confirmation of above or direction to a different conclusion.

If he registered the LLC in MD there is an annual report due April 15 (can be extended to June 15) with a $300 fee.

Thanks! It is a legal thing, not a tax return, correct?

Yes and no. We frequently do it for our clients. MD moved to online filing for it only last year so we have been trying to bump it back to them if they have no personal property to report. The form is both annual report and personal property tax return.

JAD - if he was a CA resident with a WY LLC and no activity, would he have to register and pay CA LLC tax?

sjrcpa – thanks. I am going to notify the client and suggest that this is a legal issue. Someone needs to determine if the entity must register in MD, and I think that person is not me.

EZTAX – I believe so. If he is the only one involved with the entity, then he is managing it from within CA borders, right? I don’t see how he could dodge the registration and $800 payment requirements. What do you think?

I thought so as well but two colleagues argued that since there was nothing yet to manage this was not the case. I just don't know.

Having slept on it, I think that you are right and they are wrong. Someone is making decisions regarding the entity. If there isn't someone out of state who they can point to, then it is the CA resident. Filing and $800 required.