Sales and Use Taxes in Nevada

April 13, 2006

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In Nevada a tax is imposed on all retailers for the privilege of selling tangible personal property at retail and on the storage, use or other consumption in Nevada of tangible personal property. Because the tax is related to sales or use of tangible personal property, receipts from services are generally not subject to tax. Taxable items and transactions includes the following:

producing or processing of tangible personal property for consumers who furnish the materials used in such producing, fabricating, processing, printing, or imprinting
furnishing and distributing of personal property for a consideration by social clubs
furnishing, preparing, or serving of food, meals, or drinks for a consideration
transactions in which possession of property is transferred but the seller retains the title as security for the payment of the price
transfers for consideration of the title or possession of tangible personal property that has been produced, fabricated, or printed to the special order of the customer, or of any publication
sale of company assets when the business is a registered seller

Sales and use tax rate. The Nevada sales and use tax rate is generally 6.5 percent. (In addition, make sure you contact your local governments in Nevada because they are allowed to assess a local sales and use tax.)

Tax-exempt items. Nevada has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Nevada sales tax. You'll want to check and see if you are exempt from the sales tax.

Responsibility for paying sales tax. In Nevada the sales tax is imposed on the privilege of selling tangible personal property at retail. The sales tax must be collected by the retailer from the consumer "insofar as it can be done."

Use tax. A use tax is imposed on all property that was acquired out of state in a transaction that would have been a taxable sale if it had occurred within the state. The use tax does not apply to property on which the Nevada sales tax has been paid.

Responsibility for collecting use tax. A user becomes and remains liable for the use tax in Nevada unless the user has paid the tax to the retailer and obtained a receipt.

Obtaining tax permits in Nevada. In Nevada every seller must obtain a permit, valid indefinitely, for each in-state place of business at a fee of $15. The same fee applies to location changes, additional locations, and ownership changes.

The permit must be displayed at all times at the place of business for which it is issued. If a business does not have a physical location in Nevada, it must still pay a minimum $15 fee.

Leases. In Nevada a sale includes lease or rental. A lease or rental of tangible personal property is considered a taxable sale if the Tax Commission finds that the transaction is in place of a transfer of title, exchange, or barter.

The following discussions address additional sales and use tax issues that many small business owners face: