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Nevada Basic Business Taxes 2016

Corporate Taxes & Incentives Guide
Corporate income tax:
The state of Nevada has no corporate income tax.

State business license fee:
A tax is levied for the privilege of conducting business in Nevada. All businesses that operate within the state must obtain a business license and pay an annual license fee of $200.

Sales and use taxes:
Retail sales are taxed. Tangible personal property purchases from out-of-state retailers are subject to use tax. The tax is based on the retail sale price of the property. Rate of taxation for both sales and use taxes is 6.85 percent statewide. No sales tax is levied on food items for home use, medicines, or services. Counties can opt for an additional rate up to max of 1.75 percent.

Sales and use tax abatement:
This tax reduction measure provides a partial exemption of sales and use taxes for eligible machinery and equipment used by businesses in Nevada.

To qualify for the incentive, a company must meet the standards of the Nevada State Plan for Economic Diversification and Development and have purchases that are consistent with the intent of this incentive. A minimum two out of three parameters are required to qualify:
  • Minimum hourly wage level (100 percent of the state hourly wage or county hourly wage - whichever is less) with basic health insurance package
  • Employ at least 50 full-time workers in counties with a population greater than 60,000, or 10 workers in counties with a population of less than 60,000
  • For counties or cities with a population of more than 100,000 or 60,000 respectively a capital investment of $1 million is required. For counties or cities with a population of less than 100,000 or 60,000 respectively a capital investment of $250,000 is required.
Other requirements are as follows:
Commit to maintaining the business in Nevada for at least five years and obtain state business licenses and permits.

Property tax:
Nevada statutes limit the rate of the ad valorem property tax to a total of $3.64 for each $100 assessed valuation. Assessment is 35 percent of full cash value. The current weighted average is approximately $3.17 per $100 of assessed value. The ad valorem revenue derived from old property in the aggregate is limited to a six percent annual growth rate without a vote of the people. Property is assessed in the county where it is situated.

Personal property tax abatement:
A partial abatement from personal property tax is available to qualified companies that locate or expand their business in Nevada. This tax abatement can be up to 50% of the tax due for 10 years beginning from when the abatement becomes effective. The applicant must apply for abatement not more than one year before the business begins to develop for expansion or operation in Nevada and must meet two out of the three parameters to qualify:
  • Minimum hourly wage level (100 percent of the state hourly wage or county hourly wage - whichever is less) with basic health insurance package
  • Employ at least 50 full-time workers in counties with a population greater than 60,000, or 10 workers in counties with a population of less than 60,000
  • For counties or cities with a population of more than 100,000 or 60,000 respectively a capital investment of $5 million is required for industrial or manufacturing facilities or $1 million for all other facilities. For counties or cities with a population of less than 100,000 or 60,000 respectively a capital investment of $1 million is required for industrial or manufacturing facilities or $250,000 for all other facilities
Real Property Tax Abatement for Recycling:
A partial abatement of real property (land and buildings) tax is available for businesses and facilities using recycled material that have as a primary purpose the conservation of energy or the substitution of fossil sources for other sources of energy. To qualify, the business must be in the primary trade of recycling at least 50% of raw material or an intermediate product onsite; or converting the energy derived from recycled material (specifically, industrial, domestic, agricultural or municipal waste) into electricity. Qualifying businesses can receive a partial abatement of up to 50% of the tax due on real property for not more than 10 years beginning from when the abatement becomes effective. Business must meet two out of the three parameters to qualify:
  • Minimum hourly wage level (100 percent of the state hourly wage or county hourly wage - whichever is less) with basic health insurance package
  • Employ at least 50 full-time workers in counties with a population greater than 60,000, or 10 workers in counties with a population of less than 60,000
  • For counties or cities with a population of more than 100,000 or 60,000 respectively a capital investment of $5 million is required for industrial or manufacturing facilities or $1 million for all other facilities. For counties or cities with a population of less than 100,000 or 60,000 respectively a capital investment of $1 million is required for industrial or manufacturing facilities or $250,000 for all other facilities
Modified Business Tax Abatement (Payroll tax abatement):
This tax reduction is the same as sales and use tax when it comes to criteria: two of three to qualify. The measure provides a partial exemption of payroll taxes for eligible businesses in Nevada. For counties or cities with a population of more than 100,000 or 60,000 respectively, a $1 million capital investment is required; in counties or cities with a population of less than 100,000 or 60,000 respectively, a $250,000 capital investment is required.

To qualify for the incentive, a company must:
  • Meet the standards of the Nevada State Plan for Economic Diversification and Development,
  • Have purchases that are consistent with the intent of this incentive,
  • Pay at least the average state hourly wage and offer a basic benefits package,
  • Employ at least 50 full-time workers in cities and counties with populations greater than 60,000/100,000 or 10 workers in cities and counties with a population of less than 60,000/100,000, and commit to maintaining the business in Nevada for at least five years.
Aviation Tax Abatement:
Partial abatements from Personal Property and Sales & Use Taxes are available to companies that locate or expand their business in Nevada. The personal property tax abatement can be up to 50% for 20 years on the taxes due on tangible personal property, and the sales & use tax abatement reduces the applicable tax rate to 2% for a similar 20 year period, a near 75% reduction in most jurisdictions.

Eligible Goods for sales & use tax imposed on the purchase of tangible personal property used to operate, manufacture, service, maintain, test, repair, overhaul or assemble an aircraft or any component of an aircraft. For personal property tax imposed on an aircraft and the personal property used to own, operate, manufacture service, maintain, test, repair, overhaul or assemble an aircraft or any component of an aircraft.

The Office will review the following eligibility criteria:

All companies must meet the number of full-time employee’s (FTE) requirement. A new business must have 5 or more FTEs within 1 year after receiving a certificate of eligibility. An existing business must increase FTEs by 3 or 3% of existing in-state staff, whichever is greater, within 1 year after receiving a certificate of eligibility.
In addition to the FTE requirement, all companies must meet one of the following:
a) New capital investment of at least $250,000 in Nevada within 1 year after receiving certificate of eligibility;
b) Maintain and possess in Nevada tangible personal property having a value of not less than $5,000,000 during the abatement period;
c) Average hourly wage for employees of the company shall be at or above the average statewide hourly wage;
d) The company develops, refines or owns a patent or other intellectual property, or has been issued a FAA certificate pursuant to 14 CFR Part 21.

Data Center Tax Abatement:
A partial abatement from personal property tax and sales and use tax are available to data center companies that locate or expand their business in Nevada. The personal property tax abatement can be up to 75% of the taxes due for 10 or 20 year abatement periods. Abatements for sales and use tax are for taxes imposed on the purchase of eligible machinery or equipment. The abatement reduces the applicable tax rate to 2% for a period of 10 or 20 years, a near 75% reductions in most jurisdictions. Abatements apply to colocated businesses of the data center. Note: for fiscal year 2015-2016 any partial abatement must not include an abatement of the local school support tax imposed by chapter 374 of NRS.

Eligible Goods: personal property located at the center. From the tax imposed in the gross receipts from the sale, and the storage, use or other consumption, of eligible machinery or equipment for use at a data center. Machinery or equipment necessary to and specifically related to the business of the data center or collocated business. The term does not include vehicles, buildings or the structural component of buildings.

The Office will review the following eligibility criteria:

1. Data Center must add at least 10 for 10 year abatement or 50 for 20 year abatement Full-time Employees (FTE) at least 5 years after receiving certificate of eligibility and continue to employ 10/50 FTEs for 10/20 years.
2. Data Center must make (in respective county) a cumulative capital investment of at least $25,000,000 for 10 year abatement or $100,000,000 for 20 year abatement in capital assets not later than five years after the abatement effective date.
3. Data Center must pay at least 100% of the average statewide hourly wage.
4. Data Center must have at least 50% of the employees engaged in the construction of the data center be residents of Nevada.

Renewable energy abatements:
For those companies involved in the production of energy from renewable sources such as wind, solar, and others, there is a package of abatements available including sales/use tax and property tax.

Green Building Partial Property Tax Abatement:
The Nevada State Office of Energy offers a 25 to 35 percent abatement on property taxes from 5 to 10 years for buildings which meet certain minimum LEED ratings requirements

Brownfields Cleanup Revolving Loan Fund:
The State of Nevada has developed a program to provide loans to property owners or developers who plan to clean up hazardous materials on sites in the state

Workers' compensation insurance:
As of Jan. 1, 1999, Nevada has a free market system for workers' compensation insurance. More than 100 companies have applied to become active participants in offering workers' compensation policies; rates are market-driven.

In determining and fixing premium rates for employers who began business in Nevada and who have conducted business in another state for at least three years, the insurer may take into account the previous experience of the employer in the state in which he or she conducted business.

Unemployment compensation tax:
New employers pay at a rate of 2.95 percent on the first $27,000 of salary paid to an employee. After an employer has been subject to the law for a period of from 14 to 17 calendar quarters, he or she will be assigned a rate ranging from 0.25-5.4 percent.

Pollution-control equipment:
Qualified air and water pollution-control facilities are exempt from property taxes.

Industrial fuels and raw materials:
All raw materials and supplies used in the manufacturing process are exempt from property taxes.

Sales for resale:
Sales for resale (wholesale) are exempt from sales and use taxes.

Freeport law:
All personal property in transit throughout the state, while being stored or processed for use in another state, is exempt from state property tax. Inventories held for sale within the state are also exempt from property tax.

Nevada State Contact:
Governor's Office of Economic Development
808 West Nye Lane
Carson City, NV 89703
(800) 336-1600
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated January 2016.

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