Nevada does not have corporate or personal income tax. It’s for this reason that businesses leave their states of residency to set up shop in Nevada. Individuals also flock to Nevada to escape taxation of their retirement income, even if Social Security, IRA, and 401(k) were earned while residents of their prior states of domicile. But it’s more complicated than simply using a Nevada address for convenience. Tax benefits do not apply to about 95% of Nevada corporations. Let’s explore Nevada state taxes with some caveat at the end of our discussion.
State Income Tax (Personal):
Nevada has no personal income tax; however, if you reside in another state such as California, you’ll need to apportion your income to California and file and pay taxes in California.
State Income Tax (Corporate):
There’s no state income tax for corporations and LLCs.
Commerce Tax Return:
A Commerce Tax is an annual tax for the privilege of doing business in Nevada, but this does not apply if gross revenue is less than $4 million.
Modified Business:
A Modified Business Tax is for employers who are liable to pay contributions under the Nevada Unemployment Compensation Law. This tax is based on gross wages (including tips).
Unemployment Insurance Tax:
Unemployment Insurance Tax is paid by employers and administered by the Nevada Employment Security Division. This fund is used to support people who become unemployed or are fired through no fault of their own.
Payroll Taxes:
If your Nevada LLC has employees, you must submit typical payroll taxes.
Local Taxes:
The city and/or county where your Nevada LLC is domiciled may also impose local taxes.
Additional Taxes:
Depending on your type of business, your Nevada LLC may be responsible for additional tax filings such as:
- Property Tax
- Cigarette Tax and Other Tobacco Products
- Liquor License and Tax
- Live Entertainment Tax
- Short Term Lessor Tax.
Caution: Consult a lawyer, enrolled agent, or certified public accountant before making your move.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation.
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He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to [email protected].