If a web based business whose sole income source is adsense is incorporated in Delaware, is this taxable?

Question

I am from Australia and I am setting up a web based business in the US. The sole revenue source will be adsense and YPN. If I were to incorporate in Delaware, would this be considered taxable as Google and Yahoo are both incorporated in Delaware. I will technically not be doing any business in Delaware other than incorporating. Is it better to incorporate outside of Delaware in this case.... such as Wyoming?

Answer 1

If you're in Oz, incorporate there. You can target the US market on-line from anywhere on the planet; there is no need for a specific US presence.

There is no benefit to you from incorporating in the US and you will have to pay US corporate taxes -- State and Federal -- if you do.

Although YOU are not a US resident, the corporation WOULD be and would therefore be subject to US taxation. On top of that, when you get involved in corporations and business crossing international borders you open a whole new major can of tax worms to deal with. Not the least of which will be source taxation of any income or gains that are paid to you as a non-resident alien -- typically at 30%.

From both a taxation and legal standpoint, this is a very BAD idea.

Answer 2

I can see why you want to incorporate in the US if you will be using Yahoo Publishers Network -- as they only allow US based corporations and businesses with US tax ID to join the program. If you are Australia registered, you will have no US Tax ID, and therefore cannot be accepted into YPN.

But with Adsense, there is no problem and you can join the program even if you register your business in Australia.

If you register your business in the US -- whether in Wyoming or Delaware -- you will need to pay taxes in the US.

Think whether your income from YPN would make all the hassle of incorporating in the US worth it. I've used the two on my sites, and Adsense earns for me 5x more than YPN -- so I junked YPN.

Seriously consider whether incorporating in the US will be worth it. Personally I doubt it. Go first with Adsense to see how your site responds to contextual advertising. If your site is a good fit (not all sites do well with contextual advertising such as Adsense or YPN), then consider expanding your vendors and try to join YPN --- and then incorporate in the US. Right now, the hassle willl exceed earnings expectations.

Answer 3

i'm with those who say you may want to confirm an organization employer plan. don't have your buddy clarify it to you. Have him provide it to you in demanding replica that you'll be able to fairly bypass over it with a superb teeth comb--perchance even communicate it with a lawyer. only in studying that employer plan will you even comprehend what inquiries to ask so that you're making the right alternatives. also, proceed with caution. operating with acquaintances can get very messy and sophisticated in case you do not spell out previous to time explicitly how the artwork relationship between both of you'll function. in this kind wide misunderstandings, arguments, and rifts between you could in all probability be prevented. i'm of the thoughts that it really is likewise something that could want to favor to be customary in writing. unpredicted situations will continuously enhance able to affecting your interaction. in case you've were given a plan in writing, you could continuously bypass back and examine with that settlement or perhaps advance it. don't be afraid to map out the nitty gritty. Unfortunuately that is each from time to time the nitty gritty which undermines even the finest of friendships. A gentleman's settlement or handshake will in all probability not take care of the friendship nicely adequate. analyze this new probability from all angles mutually with your eyes very wide open. it will be the perfect theory ever. besides the indisputable fact that, in case you do not comprehend previous to time what you're signing up for, it would want to be a recipe for disaster, along with the shortcoming of a superior buddy.