Living in the state of Nevada may not seem special, but it is a big deal as far as taxes are concerned. This state is one of five states that do not have a personal income tax. As a Reno accountant who works with individuals and businesses in Nevada, I wanted to discuss the tax benefits of living here.
No Make-Up Taxes
If a state does not have a personal income tax, they tend to make up for it with another tax. For example, the state of Texas does not have a personal income tax, but property taxes are substantially higher than in other parts of the country. Nevada is the best of both worlds because there is no state income tax, there are really no hidden taxes, and our sales tax is not outrageous.
Where Does Nevada Get the Money?
Historically our state gets the needed tax revenue from the mining, casino, and construction industry. The state needs the money to fund emergency services and other state services, so in this state that is how they make up for not having an income tax.
What Does It Mean?
If you compare our taxes to our neighbor to the west, California, we have huge benefits. The first is the income tax benefit, because California has income taxes of up to 9.3% at the individual level. In addition, the utility cost, and other costs to run a business are substantially lower in Nevada. Because of the lower taxes, Nevada is known to be great place to relocate your business to.
Other Reasons to Move
The other major benefits for moving to Nevada are related to energy efficiency. Nevada is a state that sees a lot of sun and wind. Because of the surplus of sun and wind, companies who are exploring alternative energy may choose to relocate to Nevada. We also are an attractive state to geo-thermal companies with the numerous hot springs we have. As an accountant, I think that Nevada has many benefits and if you are thinking about relocating your business, it might be the right place.
Why Do Some Businesses Not Move To Nevada?
Although I think there are some great financial benefits and energy benefits to moving to Nevada, there is one thing that restricts some companies—water. When I worked for a division of Dole, we considered moving our frozen fruit operation into the state of Nevada for all the reasons that I talked about before. We could save a lot and it looked like a good decision until we realized that water is not abundant in Nevada. The reason that we did not move here was that we required a large volume of water.
If you are considering moving your company to Nevada, you should contact an experienced accountant and discuss the benefits. You will also want to consider the cost to move your company. Sometimes the cost to move will be so large that the savings will never make up for it.