States with No Income Tax—Nevada
Nevada is a U.S. state in the Western region of the United State. Nevada is the seventh largest by area in the country. Tourism (especially gambling and entertainment related business) is the largest industry in the state. Nevada has very mature gaming regulations on operating and gaming products.
The tax climate in the state is incredibly business-friendly. Nevada does not have a corporate income tax, nor does it have franchise tax. In addition, Nevada does not impose personal income tax, gift tax, inheritance or estate tax, which attract the foreign investors to do business in Nevada.
Although Nevada business entities do not need to pay state income tax, they are required to pay following taxes:
- Federal Income Tax Return
According to Internal Revenue Service (IRS), all business entities must file an income tax return on or before the following April 15th (Corporation) or March 15th (LLC) of the tax year, or Oct 15th (Corporation) or Sep 15th (LLC) with extension, if calendar year is applied on tax purpose. However, the business entity must pay the tax due in full no later than the original due date for filing its tax return (not including extensions). Interest and penalty will be charged on taxes paid late even if an extension of time to file is granted.
- Nevada State Commerce Tax Filing
Business entities with Nevada gross revenue over USD 4,000,000 during the taxable year (Jul 1 ?Jun 30) is required to register with Nevada Department of Taxation to obtain the related tax ID, suitable tax rate (0.51% to 0.331%). The taxpayer needs to file Commerce Tax Return annually, and pay taxes due amount according the tax rate. The Commerce Tax Return is due 45 days following the end of the fiscal year (June 30).
- Sales or Use Tax
If the entity located in Nevada and engage in sale of certain tangible personal property or other taxable services rendered within Nevada, you must register with the Nevada Department of Taxation and pay the state’s sales tax. The use tax generally applies to the storage, use, or other consumption in Nevada of goods purchased from retailers in transactions not subject to the sales tax. Use tax may also apply to purchases shipped to Nevada consumer from another state, including purchases made by mail order, telephone, or Internet.
The state general sales tax rate of Nevada is 4.6%. The sales and use tax rate in Nevada consist of the state tax rate, the local tax rate, and any district tax rate that may be in effect.
- Payroll Tax
If the business entities have employees and pay wages in U.S., they must report income and payroll taxes withheld from their employees to Internal Revenue Service (IRS) periodically. The business entities are also responsible for filing and paying Social and Medicare Taxes (employer share amount) and Federal Unemployment Taxes.
Meanwhile, they must register as employer with Nevada Employment Security Division. If the taxable wages in the given quarter exceed USD 50,000, the employer is also assessed modified business tax (MBT). The MBT return is filed quarterly and due on the last day of the first month following the end of a payroll quarter. Employers must contribute to Unemployment Insurance Tax (UI). No withholding requirement in Nevada State.
- Annual Renewal
All active business entities registered at Nevada are required to operate in compliance with the General Corporation Law/Limited Liability Company Act of the State of Nevada. They must have and maintain a Registered Agent, which has a physical street address in Nevada ; must file Annual List with the Nevada Secretary of State every year; must renew State Business License annually; must renew the Local Business License/Permit periodically (if applicable). The annual list is an update to your corporate information registered with the state. The annual list due date for all businesses will be the last day of the anniversary month of the entity’s formation in Nevada.
If you are interested in Nevada business registration or annual renewal services, please contact Kaizen professional consultants. Kaizen U.S. office is a professional CPA firm, offers complete compliance services and business support. Please consult with Kaizen consultants for more details.
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