Consultants: how to move your company to a new state and keep the EIN & contracts [step-by-step]

Attorney and CPA Chad D. Cummings notes that consulting practices are among the easiest businesses to relocate and among the most likely to remain stuck in the wrong state. A consulting firm has no factory or storefront; its assets are a laptop, a methodology, and a client list. Yet many consultants still file annual reports and pay fees in a state they left years ago. California imposes an $800 minimum franchise tax on an LLC that earned nothing, plus gross-receipts fees above certain thresholds. New York requires costly newspaper publication for new LLCs and biennial filing fees. Illinois and New Jersey tax the income that passes through to the owner. Florida and Texas impose no personal income tax. Because most consulting practices are single-member LLCs or S corporations, that income lands directly on the owner’s personal return. Tax Foundation data shows the average business relocating to a no-income-tax state retains more than $12,500 each year. Florida and Texas also maintain strong asset-protection statutes and predictable business law, valuable when the product is advice that can later be second-guessed. Redomestication moves the existing entity so the federal employer identification number, engagement letters, banking relationships, and professional liability coverage all continue without interruption. Owners need not live in the destination state; a commercial registered agent satisfies the street-address requirement. Personal tax residency remains a separate question for counsel and a tax professional and should be resolved before any filing. Learn more about moving your consulting practice to a new state: https://www.cummings.law/redomestication/