Federal and State Tax Overview
The current federal corporate tax rate is 21%. The state of Nevada doesn’t levy a corporate income tax, instead, it has a flat 21% tax on every business that is separate from the federal corporate taxation.
Nevada Specific Taxes
- Commerce Tax: If a Nevada business makes over $4 million in annual gross revenue, it pays the Nevada commerce tax with tax rates ranging from 0.051% to 0.331% depending on the industry.
- Modified Business Tax (MBT): This is levied on payroll wages. Companies making under $1 million owe nothing, while those under $4 million pay 0%.
- Property Tax: In Nevada, property taxes are around 0.53% versus 1.07% nationally.
- Sales Tax: The general sales tax rate is 4.6% with local jurisdictions adding up to 3.55%. The total sales tax averages 8.38%, with Las Vegas having a minimum of 8.38%. Prepared food is taxed at 6.85%.
Nevada has no state income tax and is one of nine states that avoid taxing regular income.
Business Tax Rate in Nevada 2023
For 2023, Nevada’s tax system ranks 7th overall on our State Business Tax Climate Index with a state sales tax rate of 6.85%, a maximum local sales tax rate of 1.53%, and an average combined state and local sales tax rate of 8.23%.
All incorporated Nevada businesses should file an informational tax return with the Nevada Department of Revenue and a federal business tax return with the IRS. Businesses are subject to Nevada’s use tax, with the state sales and use tax rate in 2023 being 6.85%.
Registration and Filing Requirements
Before collecting sales tax in Nevada, businesses need to register with the Department of Taxation and are assigned a filing frequency based on their sales revenue. Returns are due by the last business day of the month following the tax period’s end.
Personal Taxation Example
For an individual making $70,000 a year living in Nevada, the average tax rate is 11.67% with a marginal tax rate of 22%.
Business-Specific Taxes for 2023
Nevada’s General Business tax for 2023 is 1.378% for businesses with quarterly gross payrolls exceeding $50,000. There’s an unemployment insurance tax rate of 2.95% for a gross annual wage of $40,100, with new businesses paying 3% on wages until qualifying for an experience rating.
Federal withholding rates, consisting of Medicare, Social Security, and Federal Unemployment taxes, do not vary by state. There’s no inheritance or estate tax in Nevada as of December 31, 2004.
Taxes for LLCs in Nevada
Nevada LLCs have pass-through tax status, with no personal or corporate net income tax on the state level. The tax rate is influenced by the employer’s average taxable payroll for the previous three years and the amount of unemployment taxes paid.
Miscellaneous Information
LLCs can opt for different tax statuses. There are local taxes and Workers’ Compensation rates to consider, which might vary locally. The cost of forming an LLC in Nevada offers advantages like tax benefits and asset protection.
An LLC in Nevada might not be subject to individual or corporate income taxes, barring other state taxes when doing business outside Nevada. Electing corporate tax status for your LLC by filing Form 8832 with the IRS is an option. The modified business tax (MBT) rate is 1.17 percent for businesses with employees.
Property taxes for LLC-owned real estates vary locally, and local taxes at the city or county level may apply. The default pass-through tax status may require payment of a quarterly tax on employee wages or a commerce tax if earning more than $4 million in gross revenue.