Nevada Basic Business Taxes 2012
Nevada's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include no corporate income tax, sales and use tax abatement, and sales and use tax deferment.
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 75 full-time workers in counties with a population greater than 60,000, or 15 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.
Sales and use tax deferment:
New and expanding businesses can defer sales and use taxes without interest for up to five years on certain capital goods purchases that are consistent with Nevada's plan for industrial development. These businesses must satisfy two out of three requirements:
•Purchase a minimum of $100,000 in capital equipment,
•10 new employees, or
•Minimum hourly wage in the amount of the 80 percent of the state average.
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:
An abatement of personal property may be given to businesses with operations consistent with Nevada's state plan for economic diversification and development.
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.
Qualifying criteria for certification by the Commission on Economic Development include a commitment to doing business in Nevada, minimum job creation, employee health plans, minimum capital investment, and wage requirements
Partial abatement of real and personal property taxes is provided for recycling and/or retail wheeling businesses. These businesses must meet or exceed the statewide average hourly wage. For counties or cities with a population of more than 100,000 or 60,000 respectively must hire 75 new employees and make a capital investment of at least $50 million (industrial) or $5 million (other). For counties or cities with a population of less than 100,000 or 60,000 respectively must hire 15 new employees and make a capital investment of at least $5 million (industrial) or $500,000 (other). The incentive is available at up to 50 percent for up to 10 years.
Modify 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 75 full-time workers in cities and counties with populations greater than 60,000/100,000 or 15 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.
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.
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.
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.
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
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.