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What is the Business Tax Rate in Nevada?

person using a calculator with business paperworkAs the new year approaches, it’s essential for businesses to take a look at the state of their finances to get an idea of what they will look like moving forward. Of course, understanding the tax rates for both state and federal is an important component of this evaluation. For those businesses here in Nevada, this article will walk you through the specifics of the tax rates related to the state to help give you an idea of what you can expect to pay in taxes in 2020.

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Is There a Corporate Tax in Nevada?

The good news here is that Nevada doesn’t have a state corporate income tax. Nevada is one of just four states in the country that does not require corporate or individual income tax filing. This is a major perk that makes Nevada a very attractive state for those who are looking to start a new company. However, you don’t get off completely scot-free with corporate taxes; Nevada businesses are still required to file federal corporate taxes.Related: How Much Is Payroll Tax in Nevada?

What is the Business Tax Rate in Nevada?

Even though businesses in Nevada are not subject to state corporate income taxes, there are still some state business taxes that can come into play. A couple of these scenarios include the modified business tax and Nevada’s commerce tax rate. We will take a closer look at these tax scenarios to help give you a better understanding of when your business might need to abide by these requirements. 

Nevada Modified Business Tax Rate

The modified business tax (MBT) is considered a payroll tax based on the amount of wages paid out in a quarter. If your business has taxable wages that exceed $62,500 in a quarter, then the MBT is applied. The current MBT rate is 1.17 percent. If your taxable wages fall under $62,500, then you do not pay the MBT.

Nevada Commerce Tax Rate

If your business ends up with a gross annual revenue over $4 million, then your business will pay the Nevada commerce tax rate that was put into effect in July of 2015. The tax rate will vary depending on what type of industry your company falls under. These rates range from 0.051 percent to 0.331 percent. And for those businesses that make under the $4 million gross revenue mark, please remember that you are still required to file a commerce tax return form every year (even though you don’t pay the commerce tax rate).

Nevada Corporate Income Tax Rate

As we mentioned earlier, there is no corporate income tax rate in Nevada. But remember, your business is still liable for federal taxes. Since the passage of the Tax Cuts and Jobs Act in December of 2017, the corporate tax rate has been changed to a flat 21%. This new act eliminated the graduated corporate rates schedule.As you can see, Nevada is a great state to own or start a company where there are such tax-friendly corporate laws in place. Now that you have a better understanding of the corporate tax landscape in Nevada, your business can properly prepare for 2020. With this information, there shouldn’t be any surprises as to what your business’s tax responsibilities will be by year’s end.  

Larry L. Bertsch, CPA & Associates, LLP

265 E Warm Springs Rd, #104, Las Vegas, NV 89119

Phone: (702) 471-7223