Nevada sales and use tax is an important topic for any business located in the state or a business that delivers goods or services to Nevada customers. As a retailer, you likely have an obligation to collect sales tax from customers, remit payments to the Nevada Department of Taxation, and file sales tax returns.
Disregarding these duties can be costly for your business. Noncompliance often leads to an increased risk of a sales tax audit and the accrual of hefty penalties and interest. Business owners could also face criminal prosecution in some cases because their noncompliance rises to the level of fraud or tax evasion. Our information guide on Nevada sales and use tax provides business owners with a resource for understanding their compliance obligations.
What Is the Nevada Sales and Use Tax?
Nevada sales tax is a tax collected on a percentage of the retailer’s gross receipts from the sale of tangible personal property under NRS 372.105. When a taxpayer does not pay sales tax to a retailer, it may owe a corresponding Nevada use tax on the price of the item for its storage or use under NRS 372.185.
The base sales tax rate in Nevada is 6.85 percent. However, additional local sales tax may apply depending on the county where the customer receives the property or service. For example, the combined rate for sales in Las Vegas and Clark County is the highest in the state of Nevada at 8.375 percent.
When Is a Business Responsible for Collecting Nevada Sales Tax?
The duty to register for a permit with the Department of Taxation and to collect sales tax applies to any business with a physical presence in the state. In most cases, this will be the case for any business with a storefront, warehouse, or another physical location.
Businesses located outside of Nevada could also have an obligation to register for a permit and collect sales tax from customers if they qualify as remote sellers. These are businesses that meet certain thresholds because of their taxable sales to customers located in Nevada during the previous or current calendar year. A business with more than $100,000 of retail sales or at least 200 separate retail transactions will qualify as a remote seller. These same thresholds also apply to marketplace facilitators located outside of Nevada, which are businesses that provide a platform for other retailers to offer and sale goods to customers (e.g., Amazon and Etsy).
What Goods and Services Are Subject to Sales Tax in Nevada?
Most sales of tangible personal property will be subject to sales tax in Nevada unless a specific exemption applies to the transaction. In comparison, most charges for services are generally exempt from sales tax unless stated otherwise under Nevada law. However, the application of sales tax to certain products or services can be complex because of nuances in Sections 372.040 to 372.530 of the Nevada Administrative Code or policy from the Department of Taxation.
For example, a photographer’s services are typically exempt from Nevada sales tax, including charges for consultation, set-up, processing, and the initial rendering of an image.[1] A photographer could still have taxable sales of tangible personal property for printed duplicates or enlargements of an image. It’s important to verify how Nevada’s sales and use tax rules apply to your business operations and seek professional guidance when the rules are unclear or silent on the taxability of your products or services.
Common Sales Tax Exemptions in Nevada
Your business will undoubtedly encounter transactions where a Nevada sales tax exemption could apply. These exemptions could exist because of the nature of the product or because of who the buyer is.
Common Nevada sales tax exemptions can be found in NRS Sections 372.260 to NRS 372.350 and include the following examples:
- Proceeds of mines
- Motor vehicle fuel
- Animals and plants intended for human consumption
- Farm machinery and equipment
- Durable medical equipment
- Food for human consumption
- Textbooks
- Gas, electricity, and water
- Newspapers
While these items are exempt from Nevada sales tax, they may be subject to other types of taxation in the state. For example, motor vehicle fuel dealers and suppliers owe an excise tax on their sale of fuel to retailers.
Nevada also exempts sales to certain buyers who are exempt from paying sales tax, such as government organizations or qualifying non-profits with a religious, charitable, or educational purpose. In these cases, you will need to obtain a completed Nevada sales tax exemption certificate from the buyer to verify their exempt status. Your business will also likely handle resale exemption certificates. This exemption generally applies to inventory purchases from suppliers or your customers who buy products with an intent to resell them.
How Often Do You Need to File a Nevada Sales and Use Tax Return?
Your filing frequency for sales tax returns in Nevada will depend on the amount of taxable sales your business has over certain periods.
The following sales thresholds will determine how often your business must file a sales tax return:
- Monthly: Taxable sales are more than $10,000 per month.
- Quarterly: Taxable sales are less than $10,000 per month.
- Annually: Taxable sales were less than $1,500 in the previous year.
The remittance of sales tax to the Nevada Department of Taxation is due monthly, and businesses must submit payment on or before the last day of the following month under NRS 372.355. For example, tax for sales in January would be due on or before the last day in February.
Consult with a Nevada Sales Tax Professional at Sales Tax Helper, LLC
Sales Tax Helper, LLC helps business owners and their CPAs address their most challenging sales tax concerns. Our goal is to provide companies with cost-effective support that allows them to focus on the truly important aspects of their business. If you recently became aware of a Nevada sales tax problem with your business, our professional team of CPAs, lawyers, and former auditors can help.
Schedule a free consultation with our Nevada office today to discuss our voluntary disclosure, audit defense, or sales tax appeal services.
[1] See NAC 372.330.