US Tax & Accounting — Federal CIT, State Tax & Sales Tax Nexus

A single-member LLC owned by a non-US person is treated as a disregarded entity for US federal income tax — the LLC itself pays no US tax on foreign-sourced income. However, a critical trap: the LLC must still file Form 5472 (Information Return of a 25% Foreign-Owned US Corporation) and Form 1120 (as a pro-forma return) annually with the IRS. Failure to file Form 5472 carries a $25,000 penalty per year. This is one of the most commonly missed obligations for non-US-owned LLCs.

Form 5472 must be filed by any US LLC that is 25%+ foreign-owned and engages in any "reportable transaction" with a related foreign party — including capital contributions, loans, and management fees. The form is attached to a pro-forma Form 1120. The deadline is the same as the corporate tax return: March 15 for C-Corps, April 15 for LLCs (with extension to September). The $25,000 penalty applies even if no tax is owed — it is a pure information reporting requirement.

The US federal corporate tax rate is 21% (flat, since the Tax Cuts and Jobs Act 2017). Qualifying business deductions include: ordinary and necessary business expenses, depreciation (Section 179 immediate expensing up to $1.16M in 2023, or MACRS), research and development credits (Section 41), net operating loss (NOL) carryforwards (80% of taxable income), and qualified business income (QBI) deduction for pass-through entities. State corporate taxes vary — Delaware, Nevada, and Wyoming charge none for non-operating entities.

Yes. A US C-Corp distributing dividends to non-US shareholders must withhold 30% federal withholding tax at source, unless a tax treaty reduces the rate. Common treaty rates: UK 15%, Germany 15%, Canada 15%, Netherlands 5%/15%, China 10%. The withholding is reported on Form 1042. Non-US shareholders in treaty countries must provide Form W-8BEN to claim the reduced rate. There is no withholding on LLC distributions to non-US members from foreign-source income.

Delaware LLCs that do not operate in Delaware pay no Delaware income tax — only the $300 annual franchise tax. If the company has employees, physical presence, or sales in other states, it may create 'nexus' and state tax obligations in those states. California famously taxes any LLC doing business in California at $800/year minimum plus gross receipts tax. New York, Texas, and Washington also have state-level taxes. A fully remote, non-US-operated Delaware LLC with no US nexus typically owes no US state income tax.