Nevada sales tax guide

Sales tax is a tax paid to a governing body (state or local) on the sale of certain goods and services. Nevada first adopted a general state sales tax in 1955, and since that time, the rate has risen to 4.6 percent. On top of the state sales tax, there may be one or more local sales taxes, as well as one or more special district taxes, each of which can range between 0 percent and 3.665 percent. Currently, combined sales tax rates in Nevada range from 4.6 percent to 8.265 percent, depending on the location of the sale.

As a business owner selling taxable goods or services, you act as an agent of the state of Nevada by collecting tax from purchasers and passing it along to the appropriate tax authority. Sales and use tax in Nevada is administered by the Nevada Department of Taxation.

Any sales tax collected from customers belongs to the state of Nevada, not you. It’s your responsibility to manage the taxes you collect to remain in compliance with state and local laws. Failure to do so can lead to penalties and interest charges.

In Nevada, sales tax is levied on the sale of tangible goods and some services. The tax is collected by the seller and remitted to state tax authorities. The seller acts as a de facto collector.

To help you determine whether you need to collect sales tax in Nevada, start by answering these three questions:

1. Do you have nexus in Nevada?
2. Are you selling taxable goods or services to Nevada residents?
3. Are your buyers required to pay sales tax?

If the answer to all three questions is yes, you’re required to register with the state tax authority, collect the correct amount of sales tax per sale, file returns, and remit to the state.

If you meet the criteria for collecting sales tax and choose not to, you’ll be held responsible for the tax due, plus applicable penalties and interest.

It’s extremely important to set up tax collection at the point of sale — it’s near impossible to collect sales tax from customers after a transaction is complete.

The need to collect sales tax in Nevada is predicated on having a significant connection with the state. This is a concept known as nexus. Nexus is a Latin word that means "to bind or tie," and it’s the deciding factor for whether the state has the legal authority to require your business to collect, file, and remit sales tax.

Sales tax nexus in all states used to be limited to physical presence: A state could require a business to register and collect and remit sales tax only if it had a physical presence in the state, such as employees or an office, retail store, or warehouse.

In June 2018, the Supreme Court of the United States overruled the physical presence rule with its decision in South Dakota v. Wayfair, Inc. States are now free to tax businesses based on their economic and virtual connections to the state, or economic nexus.

While physical presence still triggers a sales tax collection obligation in Nevada, it’s now possible for out-of-state sellers to have sales tax nexus with Nevada.

Out-of-state sellers with no physical presence in a state may establish sales tax nexus in the following ways:

Affiliate nexus: Having ties to businesses or affiliates in Nevada. This includes, but isn’t limited to, the design and development of tangible personal property (goods) sold by the remote retailer, or solicitation of sales of goods on behalf of the retailer. Affiliate nexus is established when:

• An out-of-state retailer is part of a controlled group of business entities with a component member with a physical presence in Nevada; and
• The component member engages in certain activities relating to the ability of the retailer to make retail sales to Nevada residents; and
• The component member conducts any other activities in Nevada that are significantly associated with the retailer’s ability to establish and maintain a market in Nevada

Click-through nexus:
Having an agreement to reward a person(s) in the state for directly or indirectly referring potential purchasers of goods through an internet link, website, or otherwise, and:

• The cumulative gross receipts from sales by the retailer to customers in Nevada through any such referrals exceeds $10,000 during the preceding four quarterly periods

Economic nexus: Having a certain amount of economic activity in the state. For sales made on and after October 1, 2019, a remote seller must register with the state then collect and remit Nevada sales tax if the remote seller meets either of the following criteria (the economic thresholds):

• Gross revenue from Nevada sales of $100,000 or more; or
• 200 or more separate transactions in the current or previous year

If you have sales tax nexus in Nevada, you’re required to register with the Nevada Department of Taxation and to charge, collect, and remit the appropriate tax to the state.

Inventory in the state: Storing property for sale in the state. This includes merchandise owned by Fulfillment by Amazon (FBA) merchants and stored in Nevada in a warehouse owned or operated by Amazon.

Trade shows: You may be liable for collecting and remitting Nevada sales and use tax on orders taken or sales made during Nevada conventions, events, or trade shows. If you make sales at one or two events during a 12-month period, you’re required to declare your intent to sell taxable goods to the event promoter. The promoter will then provide you with a one-time sales tax return. Vendors are required to submit a completed return and all applicable sales tax to the promoter, who will then remit to the state.

If you attend more than two events during a 12-month period, you’re required to register for a sales and use tax permit directly with the state of Nevada.

For more information, read about affiliate nexus, economic nexus, and trade show nexus in Nevada.

Sales tax nexus can linger even after a retailer ceases the activities that caused it to be “engaged in business” in the state. This is known as trailing nexus. As of June 2019, Nevada does not have an explicitly defined trailing nexus policy.

If you’re an active Amazon seller and you use Fulfillment by Amazon (FBA), you need to know where your inventory is stored and if its presence in a state will trigger nexus. FBA sellers can also download an Inventory Event Detail Report from Amazon Seller Central to identify inventory stored in Nevada.

If you sell taxable goods to Nevada residents and have inventory stored in the state, you likely have nexus and an obligation to collect and remit tax. To begin to understand your unique nexus obligations, check out our free economic nexus tool or consult with a trusted tax advisor.

In some states, sales tax rates, rules, and regulations are based on the location of the seller and the origin of the sale (origin-based sourcing). In others, sales tax is based on the location of the buyer and the destination of the sale (destination-based sourcing).

Nevada is a destination-based state. This means you’re responsible for applying the sales tax rate determined by the ship-to address on all taxable sales.

After determining you have sales tax nexus in Nevada, you need to register with the proper state authority and collect, file, and remit sales tax to the state. We get a lot of questions about this and recognize it may be the most difficult hurdle for businesses to overcome. Avalara Licensing can help you obtain your Nevada business license and sales tax registration.

You can register for a Nevada seller’s permit online through the Nevada Department of Taxation. To apply, you’ll need to provide the Nevada Department of Taxation with certain information about your business, including but not limited to:

• Business name, address, and contact information
• Federal EIN number
• Date business activities began or will begin
• Projected monthly sales
• Projected monthly taxable sales
• Products to be sold

The cost to register for a seller’s permit in Nevada is $15, plus a deposit based on the estimated amount of sales tax due.

You must register with the Nevada Department of Taxation if you acquire an existing business in Nevada. The state requires all registered businesses to have the current business owner’s name and contact information on file.

The Streamlined Sales and Use Tax Agreement (SSUTA), or Streamlined Sales Tax (SST), is an effort by multiple states to simplify the administration and cost of sales and use tax for remote sellers. Remote sellers can register in multiple states at the same time through the Streamlined Sales Tax Registration System (SSTRS).

Nevada became a full member of the SST on April 1, 2008.

Once you've successfully registered to collect Nevada sales tax, you'll need to apply the correct rate to all taxable sales, remit sales tax, file timely returns with the Nevada Department of Taxation, and keep excellent records. Here’s what you need to know to keep everything organized and in check.

How you collect Nevada sales tax is influenced by how you sell your goods:

Brick-and-mortar store: Have a physical store? Brick-and-mortar point-of-sale solutions allow users to set the sales tax rate associated with the store location. New tax groups can then be created to allow for specific product tax rules.

Hosted store: Hosted store solutions like Shopify and Squarespace offer integrated sales tax rate determination and collection. Hosted stores offer sellers a dashboard environment where Nevada sales tax collection can be managed.

Marketplace: Marketplaces like Amazon and Etsy offer integrated sales tax rate determination and collection, usually for a fee. As with hosted stores, you can set things up from your seller dashboard and let your marketplace provider do most of the heavy lifting.

Mobile point of sale: Mobile point-of-sale systems like Square rely on GPS to determine sale location. The appropriate tax rate is then determined and applied to the order. Specific tax rules can be set within the system to allow for specific product tax rules.

Nevada sales tax collection can be automated to make your life much easier. Avalara AvaTax seamlessly integrates with the business systems you already use to deliver sales and use tax calculations in real time.

Some goods are exempt from sales tax under Nevada law. Examples include most non-prepared food items, newspapers, and some farming equipment.

We recommend businesses review the laws and rules put forth by the Nevada Department of Taxation to stay up to date on which goods are taxable and which are exempt, and under what conditions.

Some customers are exempt from paying sales tax under Nevada law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale.

Sellers are required to collect a valid exemption or resale certificate from buyers to validate each exempt transaction.

Nevada sales tax exemption and resale certificates are worth far more than the paper they’re written on. If you’re audited and cannot validate an exempt transaction, the Nevada Department of Taxation may hold you responsible for the uncollected sales tax. In some cases, late fees and interest will be applied and can result in large, unexpected bills.

Sales tax holidays exempt specific products from sales and use tax for a limited period, usually a weekend or a week. Approximately 17 states offer sales tax holidays every year.

As of June 2019, however, there are no sales tax holidays in Nevada.

You're registered with the Nevada Department of Taxation and you've begun collecting sales tax. Remember, those tax dollars don't belong to you. As an agent of the state of Nevada, your role is that of intermediary to transfer tax dollars from consumers to the tax authorities.

Once you’ve collected sales tax, you’re required to remit it to the Nevada Department of Taxation by a certain date. The Nevada Department of Taxation will then distribute it appropriately.

Filing a Nevada sales tax return is a two-step process comprised of submitting the required sales data (filing a return) and remitting the collected tax dollars (if any) to the Nevada Department of Taxation. The filing process forces you to detail your total sales in the state, the amount of sales tax collected, and the location of each sale.

Form TXR-01 is available for downloaded, but online filing is recommended via the Nevada Tax Center web portal.

The Nevada Department of Taxation will assign you a filing frequency. Typically, this is determined by the size or sales volume of your business. State governments generally ask larger businesses to file more frequently. See the filing due dates section for more information.

Nevada sales tax returns and payments must be remitted at the same time; both have the same due date.

You may file directly with the Nevada Department of Taxation by visiting the site and entering your transaction data manually. This is a free service, but preparing Nevada sales tax returns can be time-consuming — especially for larger sellers.

To save time and avoid costly errors, many businesses outsource their sales and use tax filing to an accountant, bookkeeper, or sales tax automation company like Avalara. This is a normal business practice that can save business owners time and help them steer clear of costly mistakes due to inexperience and a lack of deep knowledge about Missouri sales tax code.

Once you have a Nevada seller's permit, you’re required to file returns at the completion of each assigned collection period regardless of whether any sales tax was collected. When no sales tax was collected, you must file a "zero return.”

Failure to submit a zero return can result in penalties and interest charges.

The Nevada Department of Taxation requires all businesses to "close their books" by filing a final sales tax return. This also holds true for business owners selling or otherwise transferring ownership of their business.

Many states encourage the timely or early filing of sales and use tax returns with a timely filing discount.

As of June 2019, the Nevada Department of Taxation offers a discount of .25 percent.

It's important to know the due dates associated with the filing frequency assigned to your business by the Nevada Department of Taxation. This way you'll be prepared and can plan accordingly. Failure to file by the assigned date can lead to late fines and interest charges.

The Nevada Department of Taxation requires all sales tax filing to be completed by the last day of the month following the tax period. Below, we've grouped Nevada sales tax filing due dates by filing frequency for your convenience. Due dates falling on a weekend or holiday are adjusted to the following business day.

Filing a Nevada sales tax return late may result in a late filing penalty as well as interest on any outstanding tax due. For more information, refer to our section on penalties and interest.

In the event a Nevada sales tax filing deadline was missed due to circumstances beyond your control (e.g., weather, accident), the Nevada Department of Taxation may grant you an extension. However, you may be asked to provide evidence supporting your claim.

Hopefully you don't need to worry about this section because you're filing and remitting Nevada sales tax on time and without incident. However, in the real world, mistakes happen.

If you miss a sales tax filing deadline, follow the saying, “better late than never,” and file your return as soon as possible. Failure to file returns and remit collected tax on time may result in penalties and interest charges, and the longer you wait to file, the greater the penalty and the greater the interest.

If you’re in the process of acquiring a business, it’s strongly recommended that you contact the Nevada Department of Taxation and inquire about the current status of the potential acquisition. Once you've purchased the business, you’ll be held responsible for all outstanding Nevada sales and use tax liability.

If you’re collecting sales tax from Nevada residents, you’ll need to consider how to handle taxes on shipping and handling charges.

Nevada sales tax does not apply to separately stated freight, transportation, or delivery fees. However, handling, crating, and packaging charges are taxable, regardless of whether they’re included in price or separately stated.

There are exceptions to almost every rule with sales tax, and the same is true for shipping and handling charges. Specific questions on shipping in Nevada and sales tax should be taken directly to a tax professional familiar with Nevada tax laws.

For additional information, see Sales Tax Information and FAQs.