Hi Heatherautumn,
Unfortunately, that would not be correct. All NET INCOME, not NET LOSS, is considered taxable in the year the NET INCOME is earned.
State Filing Fees, like with California OR other states, may exclude you from paying those costs, which are not income taxes and would never be exempt on a Federal tax return.
More information would need to be know to give an exact answer on a state by state basis.
More often than not, a new business may not generate GROSS REVENUE for providing a service or selling a product.
But you definitely will incur a COST to create or start your business.
If you have Start-Up Costs associated with the creation or starting of that business, those costs cannot be deducted on a pro-rata basis, until the business goes live, based on the type of cost in question.
There is no exemption from paying income tax in your 1st year of starting a business, if you netted a profit.
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