Nevada is one of the few U.S. states that does not impose a state income tax.
Taxation in Nevada
Nevada collects tax revenue primarily through sales tax. The general sales tax rate is 6.85%. In some counties, like Clark County, the sales tax rate is higher, at 8.375%. Property taxes also contribute to funding local services, with an average rate of 0.53%, which is among the lowest in the United States. Despite the lack of state income tax, Nevada residents are still required to pay federal income taxes.
Outlook and Comparisons
The income tax rate in Nevada is expected to remain at 0% into 2024. The state does not provide a state Earned Income Tax Credit, although federal deductions and credits are available to ease the tax burden for some taxpayers.
Of all the U.S. states, eight others — Alaska, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — also do not levy a state income tax. Unlike Nevada, New Hampshire taxes dividends and interest.
Nevada’s approach to funding state services exclusively through sales tax and other non-income-related taxes is expected to continue, given the state’s reliance on its sales tax revenue and the lack of a corporate income tax.