A critical part of running your business means paying taxes. Paying Nevada state taxes in their various forms not only keeps your business legally compliant, but it is also foundational to good business management. Failing to pay your taxes on time, filing incorrect information, or failing to file at all can result in fines and other penalties that can cripple a business and threaten its very survival. In this guide, we will discuss the types of small business taxes you might need to pay as a Nevada business owner. We will also discuss how we can help make the process smoother at tax time.
If you’re looking for further help with compliance, our Worry-Free Compliance Service can help you stay current with your Minnesota filing obligations such as license renewal and annual reports. If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses.
Step 1: Establish your Nevada business’s corporate income tax obligations
The majority of states have a typical corporate income tax. However, Nevada is not one of them. But don’t let that fool you into thinking that a business can operate tax-free in Nevada. Nevada imposes a gross receipts tax called a “commerce tax” on qualifying businesses. This commerce tax assessment is against all businesses for gross receipts that exceed $4,000,000.00 per year. The tax rate varies from .051% to .331% depending on the type of business activity. In addition, only businesses that have to pay this tax have the requirement to file a commerce tax return. The commerce tax is due 45 days after the close of Nevada’s fiscal year on June 30th. Therefore is due on or before August 14 each year.
In states with a standard income tax structure, the form of a business (corporation, LLC, etc.) is usually critical to knowing what rate your company is taxed at and whether or not certain types of taxes apply to you. However, this doesn’t apply to Nevada for two reasons. The first reason is that, as discussed above, Nevada has no corporate income tax. The second is that Nevada has no state personal income tax. Accordingly, whether the commerce tax “flows through” to the individual has little significance because the state business tax rate is based upon the type of business activity — and not by an individual’s personal tax rate.
Step 2: Determine your Nevada business’s employment taxes
Nevada’s employment taxes are included in the Nevada “modified business tax” (MBT). This is a combined tax for several Nevada social initiatives. The MBT assessment is against all businesses that have employees and pay wages. Wages need to include tips but can deduct payments made by the business for employee health insurance (which can also include spouse and dependent health insurance payments). The MBT rate is 1.378% for general businesses, but it’s a bit higher for financial institutions. Payment of the MBT is quarterly and due on the last business day of the month immediately following the applicable calendar quarter. For example, first quarter taxes would be due at the end of April.
Step 3: Establish your Nevada business’s additional state tax obligations
Similar to other states, Nevada has other taxes assessed at the state level. The first, and most common, is the state sales tax. Nevada state sales tax has a base rate of 6.85% which is then adjusted upward by local municipalities. Therefore, the combined sales tax rate can range from 6.85% to 8.375% depending on the municipality. Sales tax is payable either monthly or quarterly, and payment frequency is usually determined by the volume of sales revenue. In either case, the due date is the last business day of the month immediately following the sales tax reporting period.
After the sales tax is the “franchise” or “privilege” tax. This type of tax simply levies an assessment on businesses for the privilege of existing and operating within a state. Nevada doesn’t have a franchise or privilege tax.
Next up are unemployment taxes. While Nevada doesn’t separately tax for unemployment insurance, the tax rolls into the MBT. Accordingly, if your business is paying the MBT, it will also be paying unemployment taxes within the MBT payment.
Finally, Nevada imposes an excise tax on certain categories of goods. In particular, excise taxes are imposed on fuel, alcohol, and cigarettes. If you sell these goods, you may need to file and pay excise taxes to Nevada.
Step 4: Prepare to file and pay your Nevada business taxes
Your business will pay all of its taxes to the Nevada Department of Taxation. Fortunately, all business taxes can be paid online. If you go to the online services clearinghouse on the state’s Department of Taxation website, you can find all of the applicable forms and filing instructions. Signing up for the Nevada Tax Center portal will go a long way to making tax compliance routine in your business operations.
As mentioned above, tax compliance is good fundamental business practice. Hand in glove with tax compliance is good record keeping. In order to properly file and pay your Nevada small business taxes, it’s important to keep complete and thorough business records. Such records include:
- Customer invoices and bills
- Vendor invoices and bills
- Expense receipts (e.g., gas, vehicle repair, office supplies, etc.)
- Rent or mortgage payments
- Loan payments
- Insurance premiums
- Investment records (e.g., stock accounts, money markets, etc.)
- Payroll disbursements
While this isn’t an exhaustive list, it’ll give you a good idea of what records you need.
Do I need an accountant?
Knowing when to spend money on professional services to understand how to file small business taxes in Nevada can be difficult. Nevertheless, when it comes to tax compliance you should strongly consider hiring a tax professional. While federal tax law is complicated, state tax law can be more so given the numerous types of taxes and the individual nature of every state.
A tax professional can help you identify the proper tax obligations for your business and position you advantageously for tax assessment purposes. To get a better understanding of the types of certified tax preparers, you can visit the IRS’s website which has a summary of the various professional qualifications to help you pick the best fit for your business.
Not sure how to stay compliant? Learn more about legal compliance for small business owners.
How we can help
We know that taxes can create stress for even the most experienced Nevada business owners. We make it our job to help keep your focus on your company while not getting distracted by compliance issues. Our ZenBusiness Money App can help you manage invoices and send payments, keeping all your documents in one place for tax time.
If you’re looking for other business formation and legal compliance help, take a look at our full slate of products and services. We are here to help you throughout the life of your business.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How much can a Nevada small business make before paying taxes?
Since Nevada doesn’t have a corporate income tax, the first consideration is whether you have employees. If your business has employees you will pay the modified business tax (MBT). In addition, if your business has over $4,000,000.00 in gross receipts you’ll also pay a commerce tax.
- What percentage does a Nevada small business pay in taxes?
There’s no average rate since Nevada doesn’t have a corporate income tax. However, the MBT is a flat rate of 1.387%. The commerce tax is variable depending on the classification of your business activity, and can range from .051% to .331%.
- How does a Nevada small business pay taxes?
All taxes can be paid online through the Nevada Tax Center portal.
- Do I have to file taxes for my small business in Nevada?
It depends. If you have employees or do retail sales, you will file the MBT and also the state sales tax. If your business has gross receipts above $4,000,000.00, you’ll also file the commerce tax. Finally, if you sell certain goods, such as alcohol or cigarettes, you may need to file an excise tax.