Business owners in Nevada are not assessed a tax on either personal or business income. However, there are other state taxes that you need to know and understand. The majority of these taxes depend on the type of industry your business is in. Below are a few state taxes that you need to know about. Understanding these taxes will help you with you manage your business’ finances. When in doubt it is always a good idea to talk to an experienced Reno CPA.
Quarterly Modified Business Tax (MBT)
This is an excise tax imposed on all Nevada employers. It is based on reporting employee gross wages after taking a qualified deduction for employer paid health insurance benefits. The tax is presented as a tiered rate having a .5 percent rate on the first $62,500 of wages per each quarter. The rate rises to 1.17 percent above $62,500. Partial tax abatements are available for qualifying start-ups. Businesses can apply for a 50 percent rebate during the first four years of operation.
Gambling Industry Business Taxes
Several types of fees and state taxes are imposed upon the state’s gaming industry. Fees are collected for licensing required to be obtained by every employee conducting gambling events. State taxes on gambling establishments are based on the number of machines and gaming tables in operation and an establishment’s gross revenue. Additionally, a casino entertainment state business tax of 10 percent is imposed on all revenue from admissions, food, and other refreshments.
Nevada imposes state taxes on all businesses selling tangible personal property at the retail level. In addition, state taxes are imposed on the storage, use and consumption of all tangible personal property. This tax relates strictly to tangible personal property for sale or use and does not include revenue related to services supplied such as attorney or doctor fees. The typical sales and use tax is 6.5 percent but has been temporarily raised to 6.85 percent covering the time from July 1, 2009 through June 30, 2011. In addition, leases are considered tangible property sales and are subject to state taxes.
Use taxes are imposed upon property acquired out-of-state that would be subject to sales taxes if the transaction had occurred in Nevada. Use taxes never apply to property where a sales tax has been collected. Responsibility for collecting and remitting a use tax remains the liability of the property user unless this tax has been paid to a retailer, and a user has receipt confirmation.
Taxable Items and Transactions
The following are items and transactions subject to Nevada sales tax:
- Production and processing of finished products created for consumers.
- Food and drink preparation and serving.
- Furnishing and processing personal property by social clubs.
- Property transferred but where a title is retained as security for payment.
- Transfers of property for title consideration that has been produced, fabricated, processed or printed to special order for a customer or publication.
- Sales of company assets by a registered seller.
You can try to manage all of these taxes by yourself, but a Reno CPA should conduct careful examination of all state tax laws affecting your business.