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Nevada is best known for its opulent casinos, high-end restaurants and world-class hotels. Travel and tourism businesses are flourishing in this state. Whether you plan to open a bar, a casino or a retail store, there are a few things to know beforehand. Entrepreneurs and business owners are subject to legal regulations and tax rules, such as the Nevada sales tax.
TL;DR (Too Long; Didn't Read)
The state of Nevada requires business owners to collect a sales tax of 6.68 percent to 8.26 percent.
Does Nevada Collect Sales Tax?
Nevada residents are not required to pay income tax, which makes this place appealing to entrepreneurs. This state, though, charges a higher sales tax than Ohio, Virginia, Wisconsin, North Carolina, Georgia and others. In fact, the money raised through this tax accounts for 40 percent of state and local revenue. The government charges sales tax on all physical goods and some services sold to customers.
The Nevada sales tax has been around since the 1950s. In 1955, it was established at 2 percent. In 2013, it reached 8.1 percent. Currently, it ranges between 6.68 percent and 8.26 percent. In 2018, Internet-based retailers and other remote sellers became subject to this tax, too. Those who exceed $100,000 in sales or 200 transactions in the previous or current year are required to collect sales tax.
Whether or not you owe this tax depends on several factors. Any business that has a significant presence – or nexus – in the state of Nevada is liable for sales tax. This category includes both independent contractors and businesses with an office or warehouse, real estate, merchandise, affiliates or employees in the state. Companies collect this tax at the point of sale.
Taxable Goods and Services
With a few exceptions, most products are subject to sales tax. Motor vehicles, home decorations, construction materials, beauty products and custom or prewritten computer software are just a few examples. If you sell groceries, prescription drugs, raw materials, medical devices or newspapers, you're tax-exempt. Most service providers don't have to pay sales tax.
Nevada Use Tax Explained
Some companies that operate in Nevada are required to collect use tax. The government charges this tax on most goods purchased tax-free outside of the state and transported into Nevada. It also applies to goods that were bought tax-free over the Internet or by mail. Its role is to protect local businesses from a competitive disadvantage.
Let's say you own an electronics store in Nevada and decide to order goods from a distributor located outside the state. In this case, you're liable for use tax.
How to Pay Sales Tax
If you're required to collect sales tax, register with the state through the SSTRS (Streamlined Sales Tax Registration System). All you have to do is to sign up for an account and fill out an application online. Registration is not required for companies that plan to use a Certified Service Provider (CSP).
When completing the registration process, you must provide some basic information about your business. You'll be required to enter your business name and legal stature, Social Security Number or EIN (Employer Identification Number), contact details, state of incorporation and more. Submit the registration form and wait to receive a confirmation email.
Beware that sales tax rates vary from one city to another. The sales tax in Reno, NV, for example, is 8.26 percent. Las Vegas sales tax is 8.25 percent. Carson City, Fallon and Cold Springs all charge a 7.6 percent sales tax, which is significantly lower. If your company operates in several states, you must register for and collect sales tax in each state.
- Tax Foudation: State and Local Sales Tax Rates, 2019
- USA Today: Tax Policy - States With the Highest and Lowest Taxes
- State of Nevada: Sales Tax Information & FAQ's
- Nolo: Nevada Internet Sales Tax
- State of Nevada: Sales and Use Taxes
- State of Nevada: Use Tax Information & FAQ's
- Sales Tax Institute: What Is the Difference Between Sales Tax and Use Tax?
- Sales Tax States: Sales Tax Calculator of 89509, Reno for 2019
- Avalara: Las Vegas, Nevada Sales Tax Rate
Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.