Nevada Tax Rates

This post provides an overview of the primary taxes levied at the state level in Nevada. The information contained here is intended for general reference. Nevada is notable for its competitive tax structure, lacking a traditional income or corporate tax. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

Nevada is one of only a handful of states that does not impose an individual income tax.

  • State Rate: The state income tax rate is a flat 0.0%.
  • Wages and Retirement: This means that wages, capital gains, interest, dividends, and retirement income (including pensions and Social Security benefits) are not subject to state income tax.
  • Local Income Tax: Nevada does not impose a local or county income tax.

Business Taxes (Instead of Corporate Income Tax)

Nevada does not impose a state corporate income tax or a franchise tax. Instead, it uses two main taxes on business receipts and payroll to generate revenue.

1. Modified Business Tax (MBT)

This is a payroll-based excise tax on employers.

  • Applicable Entities: All employers who pay wages in Nevada.
  • Taxable Base: Gross wages paid to employees, subject to an exemption on the first $50,000 of wages paid per calendar quarter for most businesses.
  • General Business Rate (Reduced): 1.17% on the gross wages exceeding the $50,000 quarterly exemption (effective July 1, 2023).
  • Financial Institutions Rate: 1.554% on all gross wages paid, with no quarterly exemption.

2. Commerce Tax

This is a gross receipts tax on businesses with significant Nevada-sourced revenue.

  • Applicable Entities: Businesses with annual Nevada gross revenue exceeding $4 million.
  • Tax Rate: The rate varies by industry, based on the business’s North American Industry Classification System (NAICS) code, ranging from 0.051% to 0.331%.

Sales and Use Tax

Sales tax is a crucial revenue source for the state, combining a state base rate with significant local additions.

  • State Base Rate: The general state sales tax rate is 6.85% on the retail sale of tangible personal property.
  • Local Taxes: Local jurisdictions (counties and cities) add various local sales taxes for specific purposes (e.g., transportation, public safety).
  • Combined Rate: The combined state and local sales tax rate varies significantly by county, with the maximum rate reaching 8.375% in Clark County (Las Vegas area) and Washoe County (Reno area). The average combined rate is approximately 8.24%.
  • Exemptions: Key exemptions include groceries (unprepared food for home consumption) and prescription drugs.
  • Use Tax: A state use tax of 6.85% applies to taxable goods purchased from an out-of-state vendor that were not subject to the Nevada sales tax.

Property Tax (Ad Valorem Tax)

Property taxes in Nevada are collected at the local level by counties and are notable for being among the lowest in the U.S., largely due to protective tax abatement laws.

  • Assessment: Property is assessed at 35% of its taxable value. Taxable value is calculated as the cash value of the land plus the replacement cost of improvements (structures) minus annual depreciation (1.5% per year up to 50 years).
  • Tax Abatement/Caps: Nevada has a property tax abatement law that limits the annual increase in property taxes:
    • Residential Cap: The tax on an owner-occupied primary residence cannot increase by more than 3% per year.
    • General Cap: The tax on other types of property is capped at an annual increase of 8%.
  • Tax Calculation: The tax is determined by applying the local mill levy (the local tax rate) to the assessed value.

Unique and Miscellaneous Taxes

  • Gaming Tax: Nevada imposes a substantial tax on gross gaming revenue generated by casinos, which is a key component of state revenue.
  • Motor Fuel Tax: A per-gallon tax is levied on motor fuels, set at approximately 23.81 cents per gallon for gasoline.
  • No Estate or Inheritance Tax: Nevada does not impose a state-level estate tax or inheritance tax.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.