On May 31, 2015, the Nevada Legislature adopted the Nevada Revenue Plan, which altered the landscape of business taxes within the state. The package increased annual business fees (primarily for corporations), expanded a former payroll tax, increased the cigarette tax, and adopted a new Commerce Tax on gross receipts of businesses with at least $4 million of in-state revenue. Temporary payroll and sales taxes, which had been set to expire, were made permanent.
The Nevada Revenue Plan is so extensive that we have put together this page to help you understand the new taxes every business is required to pay.
Business Registration Fees
Though not technically a tax, the Nevada Business Registration Fee is levied upon all business entities in the state. Formerly, Nevada corporations and Nevada LLCs each payed $200 per year to renew their business registrations.
Under the new law, the $200 fee for Nevada LLCs will remain in place, but the fee for Nevada corporations has been increased to $500.
Initial and Annual Lists
Nevada corporations and LLCs must both file Initial Lists and Annual Lists. In the past, the fee has been set at $125 for LLCs, and a graduated fee for corporations which began at $125 and increased depending on the amount of authorized stock.
The Nevada Revenue Plan adjusts these numbers upwards by $25. LLCs will now pay $150. Corporations must pay a minimum of $150, and all graduated levels above that minimum have been increased by $25. The maximum fee is now set at $11,125.
Nevada levies a Modified Business Tax (MBT) on payroll wages. The previous tax was set at 1.17% above an exemption level of $85,000 per quarter, although certain industries, such as financial institutions, paid a higher rate.
The new law imposes a 1.475% MBT after July 1, 2015 and lowers the exemption to $50,000 per quarter. The intent of this move was to both add more taxpayers to the pool and to extract more money per payer.
However, the MBT comes with a caveat: after the first year, taxpayers may deduct up to 50% of Commerce Tax payments over the previous four quarters from their MBT liability. This adjustment should help companies lower their tax burden.
The single most controversial element of the Nevada Revenue Plan has been the adoption of the Commerce Tax. The Commerce Tax is a modified gross receipts tax.
The state has divided the local economy into 26 categories, basing the classifications upon the North American Industry Classification System (NAICS). Each of the 26 categories is assigned its own unique tax rate. The rates range from .051% to .331%.
Commerce Tax Categories and Rates
|Industry Category||Commerce Tax Rate|
|Waste Management Services||.261%|
|Publishing, Software, Data Processing||.253%|
|Arts, Entertainment, & Rec||.240%|
|Food Services (including restaurants)||.194%|
|Administrative & Support Services||.154%|
|Management of Companies||.137%|
|Warehousing and Storage||.128%|
The Commerce Tax is imposed on gross revenue in excess of $4 million per year. Certain subtractions can be made from that amount, such as stock proceeds, bad debts that are already expensed on federal tax returns, and certain other exemptions.
In the case of a business whose enterprise spans more than one industry category, the Commerce Tax is applied based upon the industry category where a company does the plurality of its economic activity.
The Nevada Revenue Plan increases cigarette tax from 80 cents per pack to $1.80 per pack, a 125% increase.
A temporary Local School Support Tax, which was set to expire at the end of 2015, has been made permanent. This tax makes up a portion of Nevada’s sales tax.