LLC vs S-Corp in Nevada

Choosing between an LLC and an S corporation in Nevada turns on three things: liability protection (both forms provide it), federal tax treatment (the LLC is flexible, the S corp is fixed), and Nevada's specific tax posture (no individual income tax, no corporate income tax on most pass-through income, but a Modified Business Tax and Commerce Tax do apply). The differences between Nevada and other states matter most on the tax side because Nevada is one of the lowest-tax operating environments in the country. Liability Protection. Both a Nevada LLC and a Nevada corporation that elects S status provide a liability shield: the owner's personal assets are not exposed to the entity's contractual or tort liabilities, provided the entity is properly maintained (separate bank account, no commingling, observance of formalities). For a tradesperson, the shield is especially valuable on Nevada's strict NRS 624 framework: an unlicensed-contracting determination, a residential-recovery-fund claim, or a successful negligence suit can reach the entity but not the owner personally if formalities are kept. Nevada has a robust charging-order-only remedy for LLC interests under NRS 86.401, which makes the LLC a strong asset-protection wrapper, particularly for single-member LLCs (Nevada is one of the few states that extends charging-order-only protection to single-member LLCs by statute). Federal Tax Treatment. A Nevada LLC by default is a disregarded entity for a single owner or a partnership for multiple owners; income flows through to the owners' personal returns and is subject to self-employment tax on the owner's distributive share of net business income (15.3% on the first ~$168,600 in 2024, 2.9% above that, plus 0.9% Additional Medicare Tax above $200,000 single / $250,000 joint). A Nevada LLC may elect to be taxed as an S corporation (Form 2553) without changing its legal form. Under S-corp tax treatment, the owner pays themselves a 'reasonable salary' subject to payroll tax, then takes the remainder as a distribution that is not subject to self-employment tax. For a profitable trades contractor netting $80,000 to $300,000, the S-corp election typically saves $5,000 to $15,000 per year in self-employment tax, net of the additional payroll-administration cost. Below ~$60,000 net, the savings are usually offset by payroll costs and additional tax-prep fees. Nevada State Taxes. Nevada has no individual income tax and no corporate income tax. That makes Nevada one of the friendliest operating states for pass-through income at the state level. Three Nevada-specific business taxes do apply. - Modified Business Tax (MBT). NRS 363B applies to general businesses with quarterly Nevada wages above $50,000 (per quarter). The rate is 1.378% on wages above the $50,000-per-quarter threshold (after deducting health-care premiums paid). Source: NRS 363B (https://www.leg.state.nv.us/NRS/NRS-363B.html). - Commerce Tax. NRS 363C applies to businesses with Nevada gross revenue above $4,000,000 in a fiscal year. Rates vary by NAICS industry classification; the construction industry rate is 0.083%. Source: NRS 363C (https://www.leg.state.nv.us/NRS/NRS-363C.html). - State Business License. NRS 76 requires every entity doing business in Nevada to hold a state business license through the Secretary of State. The annual fee is $500 for corporations and $200 for LLCs. Source: NRS 76 (https://www.leg.state.nv.us/NRS/NRS-076.html). Nevada Filing Specifics. Formation. Nevada LLCs are formed by filing Articles of Organization with the Nevada Secretary of State (https://www.nvsos.gov/). Filing fee is $75 plus the State Business License fee. Initial List of Managers/Members ($150) is required within 30 days. Total first-year filing cost: $425 ($75 Articles + $200 LLC SBL + $150 Initial List). Annual Renewal. Annual List of Managers/Members ($150) and State Business License renewal ($200 LLC / $500 corporation) are due each year on the anniversary of formation. Failure to renew triggers default and eventual administrative dissolution. Registered Agent. NRS 86.231 requires every Nevada LLC to maintain a registered agent with a Nevada street address. Owners may serve as their own agent if they have a Nevada street address; commercial registered-agent services typically cost $50 to $200 per year. NSCB Considerations. The Nevada State Contractors Board licenses entities, not individuals, so the entity form (LLC, S-corp, sole prop) is what holds the license. Changing entity form (e.g., LLC to S-corp election) does not require a new NSCB license, but a change in entity legal form (e.g., dissolving the LLC and forming a new corporation) does require a new NSCB application and a new bond, and requires re-passing the qualified individual through the new entity. Plan accordingly. When Each Form Wins. - Single-owner small contractor under ~$60,000 net: a default-taxed Nevada LLC is usually the right choice. Lower compliance cost, charging-order asset protection, no payroll administration burden. - Profitable contractor over ~$80,000 net: a Nevada LLC with an S-corp election typically wins on self-employment tax savings. - Multi-owner partnership: a Nevada LLC with a custom operating agreement, optionally with an S-corp election if all owners qualify (no nonresident-alien owners, no more than 100 shareholders, single class of stock). - Owner planning to take outside investors or grant equity: a Nevada corporation (C-corp default, optionally S-corp) is more familiar to investors than an LLC. This is general information about Nevada entity choice. Confirm the tax math and the entity strategy with a Nevada-licensed CPA and a Nevada attorney before forming or changing entity form. Tax law and Nevada statutes change.