An Overview of Nevada State Taxes
Like the majority of residents of each state in the U.S., people in Nevada are responsible for paying both federal and state taxes. Nevada residents pay property and sales taxes, but unlike most other states, Nevada does not have an income tax.
Nonetheless, if you live in Nevada, you need to make sure you file accurate tax documents for both federal taxes and other state taxes for which you are responsible. Failure to do so could result in penalties, interest charges, and even criminal prosecution.
Another reason to keep up with tax regulations is to avoid common tax-related scams. Some of these crimes involve scammers pretending to work for the IRS and demanding immediate credit card payment for late tax payments (real IRS representatives do not call without first communicating by mail or email).
With proper knowledge, you’ll also protect yourself from unscrupulous or unqualified tax preparers and keep from unwittingly breaking tax laws. Finally, you can protect yourself from tax-related identity theft.
Luckily, once you are aware of federal and Nevada tax regulations, you can efficiently and accurately file both U.S. and state taxes. Here is what you need to know to do so.
Table of Contents
Nevada Income Tax
Nevada is one of seven states that do not require residents and non-resident workers to pay income tax. These none-income-tax states often get revenue from other sources. For example, gambling is legal in Nevada, and the state taxes gaming revenue at a rate of 6.75%. There are also hospitality taxes of as much as 12% on hotel reservations, and sales tax rates are above 8% in urban areas such as Las Vegas.
These extra taxes are focused on gaming businesses and tourists. However, Nevada residents also have to pay these taxes if they stay in hotels or get revenue from gaming.
These extra taxes do have some advantages for Nevada residents. Property taxes for the state are below average compared to other places in the U.S.
Nevada Sales Tax
Sales taxes vary by county, and the rate for each county includes both a state component and local component. The lowest tax rate in Nevada is 6.85% (in Humboldt, Mineral, Esmeralda, and Eureka counties). Clark County, where Las Vegas is, has a state’s highest sales tax rate of 8.375%. Nevada also has a use tax for the consumption of goods.
Retailers and marketplace operators pay sales taxes, and they usually pass these charges on to consumers at the point of sale.
Sales Tax Exemptions
Most items that you purchase in Nevada are subject to sales or use taxes. However, there are some notable exceptions to this rule. Items exempt from sales tax include:
- Seeds to grow livestock feed;
- Items sold to government entities such as the U.S. military;
- Items that charitable or religious organizations sell to fund their non-profit operations.
Nevada Property Taxes
Nevada has an effective property tax rate of 0.75%, which is lower than the national average. Thirty-four states have higher property taxes than Nevada.
Property taxes in Nevada get based on the value of the property and the replacement cost of all structures on the property.
The assessed value of a home is 35% of its taxable value. So, in practice, property owners pay for one-third of the value of their property. For example, if a property’s taxable value is $100,000, then its assessed value is $35,000. The property tax rate, which varies by county, gets placed on the assessed value.
In Clark County, for example, the property tax rate is 3.5%, or $3.50 per every $100 in assessed value. Therefore the property tax on the $100,000 home is $35,000 (the assessed value) multiplied by 0.035 (the property tax rate).
Nevada has a tax abatement law that protects homeowners from large sudden spikes in their property tax rates. Rates can never rise more than 3% year over year. So even if your home goes up in value by 10%, your property tax rate cannot go up by more than 3% per year.
Locating Your County Assessor
Property taxes are assessed at the county level. County assessors decide the taxable and assessed value of properties and communicate the tax bill information to real estate owners.
There are county assessors in each county in Nevada. They appraise all properties within the county at least once every five years. Though these assessors work for their counties, they operate with some direction from the state authorities. Nevada’s Division of Assessment Standards oversees and provides guidelines for county assessors. You can visit the Nevada State Department of Tax to locate information for each county assessor.
Nevada Estate Taxes
Some states have one or two forms of taxation on inheritance. They either levy an estate tax, an inheritance tax, or both. A beneficiary (the person who inherits property from the deceased person) pays inheritance tax after they receive the property or other valuables according to the benefactor’s will. The estate tax is on the estate of the deceased person before the inheritance gets disbursed. It gets paid out of the estate’s funds.
Nevada currently does not have an estate tax. If a death occurred after January 1, 2005, you do not need to file an estate tax return with the state. Nevada does not have an inheritance tax, either. However, you may need to pay federal taxes on an estate in some situations.
Tips for Filing Taxes in Nevada
Nevada does not have income tax returns, so you do not need to report income to the state. You do, however, still need to file federal income tax returns by the due date. This date is usually April 15, unless that day falls on a weekend. In that case, tax returns are due on the following Monday. Your returns must be submitted electronically or have a postmark from the due date.
Business owners can use the Nevada Secretary of State’s SilverFlume portal to get information and support when it comes to tracking and paying taxes. The Nevada Tax Center helps residents pay fees online. The portal also includes information about sales taxes and new tax regulations.
You can also seek face-to-face advice at local IRS offices in Nevada. They will help with questions and forms related to federal tax returns.
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This post was updated January 23, 2020. It was originally published January 23, 2020.