LLC vs S-Corp in Wyoming

Wyoming has no state personal income tax and no state corporate income tax. Wyoming funds state operations primarily through severance taxes on mineral production, sales tax, and property tax. Verify current tax posture on the Wyoming Department of Revenue site (https://revenue.wyo.gov/) before relying. The Wyoming Secretary of State handles entity filing. The IRS handles the tax classification via Form 8832 and Form 2553. A Wyoming LLC can elect to be taxed as an S corporation. Wyoming LLC basics. - Articles of Organization filed online with the Wyoming Secretary of State Business Division (https://sos.wyo.gov/Business/Default.aspx) via the WYOBIZ portal (https://wyobiz.wyo.gov/). The standard filing fee is $100. - Annual report. Every Wyoming LLC must file an annual report with the SOS. The annual report license tax is $60 or two-tenths of one mill on the dollar ($.0002) of assets located in Wyoming, whichever is greater, under Wyoming Statute 17-16-1630. Most small LLCs pay the $60 minimum. - Single-member LLCs default to disregarded entity for federal tax. Multi-member LLCs default to partnership tax. Either can elect S corp treatment with IRS Form 2553. - No Wyoming corporate or personal income tax; no franchise tax aside from the annual report license tax. Wyoming S corp basics. - Wyoming recognizes the federal S election. At the state level, there is no S corp income tax return in Wyoming because there is no state income tax. An S corporation operating in Wyoming still files a federal Form 1120S and issues K-1s to shareholders, who report the income on their home-state personal returns (or no state return if they are Wyoming residents). - Payroll. An S corp must pay its owner-employee a reasonable W-2 salary. Wyoming imposes state unemployment insurance (UI) tax through the Department of Workforce Services once the business crosses the wage threshold, plus mandatory workers' compensation coverage through the state fund for most construction employers. Why a Wyoming trades shop might elect S corp. The main driver is federal self-employment tax savings. Since Wyoming has no state income tax, the state-tax side is zero for both LLC and S corp. A disregarded-entity LLC owner pays self-employment tax on the full net profit. An S corp owner-employee pays payroll tax on wages only; the distribution portion avoids self-employment tax. The federal payroll-tax math is the entire decision in Wyoming. Rule of thumb. Start as a Wyoming LLC. When annual profit after a reasonable owner wage is high enough that payroll tax savings clear the payroll, retirement plan, and accounting costs, elect S corp. A CPA can run the breakeven for your numbers and confirm the Wyoming SOS filings, annual report schedule, and any State Fire Marshal electrical license-holder requirements for the entity you choose. Note on Wyoming as a holding-company state. Wyoming is commonly promoted as a business-friendly domicile for holding companies because of its zero state income tax and relatively low annual report fee. For a working trades contractor who actually performs work in Wyoming, the LLC or S corp analysis above applies regardless of marketing. If you perform work in another state, that state's tax and licensing rules apply to your work there, not Wyoming's.