I have a S-corp and moving to another state. Some questions!!! (incorporate, sales)

[lucdolski]

Hey all,

Within 2 months, I am moving from New York City to greater Seattle area. I currently have a one person S corp and was wondering what I need to with it.

Here’s the basic info about the S corp:
- It is for online e-tail business.
- There is only 1 person holding stock: me and me only
- Average annual gross income is anywhere between 15 ~ 35K
- Average annual net income is anywhere between 10 ~ 28k (which I take approx. 80% of it as my salary).
- I’m never late on paying any kind of taxes: payroll, sales tax, etc.
- Material value-wise, the S corp is probably worth about 2 ~ 3k for equipment and materials (everything else is intellectual property).

Before I contact my CPA (whose firm does both my s corp and personal taxes), I want to be educated about my options (my CPA is very good and he’s even better at sweet talking).

If it’s possible, I want to keep the title and EIN of the S corp since I’ve worked so hard to brand my (business) name. But if it’s going to cost me arms and legs, I have no problem starting over.

Thanks.

[MrRational]

.

Originally Posted by lucdolski

I currently have business registered with the State of New York.
- It is a one person S corp ...me and me only
- Material value ...about 2 ~ 3k for equipment and materials

I am moving from New York City to greater Seattle area
I want to keep the title and EIN of the S corp
... my (business) name is the only real asset

I want to be educated about my options...
But if it’s going to cost me arms and legs, I have no problem starting over.

The EIN is attached to the NY charter registration.
The trade name isn't.

So long as some WA corporation isn't also using that trade name...
it shouldn't be a problem to use it in WA as well when you register the NEW corporation.
Closing the NY corp registration might be a bigger pita.

There are a few admin tasks and if you have a gazillion 1099's it can be more so..
but changing to a new Federal EIN shouldn't be a big issue.

[harry chickpea]

The concept is a "foreign corporation." You maintain a minimal presence in the state of origin - rent a tiny office space or desk - and continue to pay taxes on the corporation as you have. It can have tax advantages, which is why may corporations start up with a Delaware corporation or incorporate in some other tax friendly state.

You should strongly consider a better CPA. With a subchapter S, your income does not have to pass through as wages subject to other taxes. In a small company, you are generally better off with a pass through for at least the first few years. Be warned though that if you do so for too long a period you will opt out of being able to collect social security and medicare if you become disabled.

One of the downsides of foreign corporation is that if you get in a legal dispute, your court of remedy may be in the original state.