Sales Tax Information & FAQ's

The following information is for general guidance only. Please be advised that any information made available through FAQs cannot change controlling statutes or regulations and any such information is not intended to constitute “written advice” for purposes of NRS 360.294. To obtain written advice, please request an advisory opinion.

Overview:

Sales Tax is statutorily imposed on the sale, transfer, barter, licensing, lease, rental, use or other consumption of tangible personal property in Nevada.  Sales/use legislation was initially enacted in Nevada in 1955.

Who is affected?

Persons who are in the business of selling or transferring tangible personal property.

When is sales tax due?

Taxes are due in the period when the sales transaction takes place and cannot be delayed until the retailer actually receives payment from the customer.

What is taxable?

Nearly all tangible personal property transferred for value is taxable.  Most goods, wares and merchandise are taxable in Nevada. Services necessary to complete the sale of tangible personal property are taxable. Only installation and repair/reconditioning service is not taxable if it is separately stated on the invoice and as of May 2009 transportation, shipping and postage charges are not taxable if separately stated on the customer's invoice. Other items that are not taxable include unprepared food, farm machinery and equipment, newspapers, and interest, finance and carrying charges on credit sales. You may write to the Department of Taxation about the taxability of a specific item.

Are delivery charges taxable?

As of May 22, 2009 any charges for freight, transportation or delivery in connection with the sale of tangible personal property separately stated to the end user are NOT taxable pursuant to AB403. Handling, packaging, and crating or any other services in connection with the  freight, transportation or delivery are still taxable even if separately stated. Charges for freight or transportation before the sale of tangible personal property (in-bound freight) is taxable as either part of the sales price of the product or a pass through freight charge stated separately from the product sold on the invoice to the end user.

Is the lease or rental of tangible personal property taxable?

Yes.  Sales tax is due from the lessee on all tangible personal property leased or rented. An option is given on how to pay this tax.  Sales Tax can be paid on the total cost at time of purchase of the property, or Sales Tax can be collected from the customer on the total lease or rental charges within this State.    NRS 372.060, 372.085, 372.105

Is labor taxable?

Fabrication labor is always subject to Sales/Use Tax when the tangible personal property is sold at retail.  Repair/reconditioning and installation labor is not subject to tax if it is separately stated on the invoice.    NAC 372.380, 372.390-372.400 and NRS 372.025 and 372.065

I am in the business of consulting, is this subject to Sales Tax?

In Nevada, Sales/Use Tax is imposed on the sale, transfer, lease, rental, use, or other consumption of tangible personal property for consideration.  Services not in conjunction with a sale of tangible personal property are not subject to Sales Tax.  However, the provider of the services may have a Use Tax liability on the materials and equipment used or consumed in providing the service, if they were purchased without paying sales tax.  Nevada Revised Statute 372.085, 372.105 and 372.185

Are vehicles, aircraft, and off highway vehicles purchased in another state subject to Nevada Sales Tax?

Yes, if they are purchased for use or storage in Nevada. In order to be registered in Nevada, proof that Sales Tax has been paid to Nevada or another state is required on all licensed vehicles (cars, trucks, motorcycles, trailers) aircraft and off highway vehicles. If proof cannot be provided, Use Tax must be paid to Nevada. Sales Tax legitimately paid to another state is applied as a credit towards Nevada Use Tax due.     NAC 372.055, NRS 372.185

Do I have to pay Nevada Sales Tax when I purchase a boat?

Yes, if the boat is purchased for use or storage in Nevada. Nevada does honor Sales Tax paid to another state in an amount equivalent to Nevada's.  If you purchased a boat and trailer from an out-of-state dealer and paid Sales Tax to that state at an equivalent rate, your Sales Tax obligation has been met.   If you paid Sales Tax at a lesser rate to another state, you will need to pay the difference directly to Nevada.   If you did not pay Sales Tax at the point of purchase, then Nevada Sales/Use Tax is owed on the purchase price, including all accessories. Please, bring all pertinent documentation to the Department of Taxation office to pay the tax and receive a tax clearance, you may then proceed to the Department of Motor Vehicles to register the trailer and the Division of Wildlife to complete the required registration for the boat.       NAC 372.055

Is beer, wine, and liquor subject to Sales Tax?

Sales Tax applies in the retail sales of beer, wine, and liquor to the entire amount charged for the product, including the amount of all other state and federal taxes imposed on the product.    NAC 372.150

Is the sale of coins or uncancelled stamps subject to Sales Tax in Nevada?

The sale of postage stamps through vending machines is not subject to Sales Tax because such stamps represent an intangible right to receive services and are not tangible personal property.  The tax applies to sales of coins and uncancelled stamps at a premium price (exceeds 50% of the face value) for purposes other than use as a medium of exchange or postage.  The tax does not apply to sales of coins or uncancelled stamps, even though sold at a premium price, if the purpose of the use of the coins or stamps is as a medium of exchange or postage.    NRS 372.085 and NAC 372.170

Is software, electronic magazines, clipart, program code, or other downloaded material taxable to Nevada residents?

No. Products delivered electronically or by load and leave are not subject to Nevada Sales or Use Tax. However, products ordered via the internet and shipped into Nevada are taxable, as well as any software transferred via a disk or other tangible media. A box of software or other product shipped to customers in this state is physical, tangible personal property and subject to sales tax.

Do all companies automatically add Sales Tax to taxable mail order, out-of-state, internet and telephone purchases?

No, only companies registered to collect Nevada Sales Tax. If a seller is not registered to collect and remit Nevada Sales Tax, the Nevada purchaser must pay Use Tax directly to the State of Nevada.

What is Streamlined Sales Tax?

The goal of this effort is to find solutions for the complexity in state sales tax systems that resulted in the U.S. Supreme Court holding that a state may not require a seller that does not have a physical presence in the state to collect tax on sales into the state.  The Court ruled that the existing system was too complicated to impose on a business that did not have a physical presence in the state.  The Court said Congress has the authority to allow states to require remote sellers to collect tax.

The result of this work is the Streamlined Sales and Use Tax Agreement.  The purpose of the Agreement is to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance.  The Agreement focuses on improving sales and use tax administration systems for all sellers and for all types of commerce.

Does Nevada offer incentive programs for Sales/Use Tax?

Nevada offers Sales/Use Tax deferral and Sales Tax abatement programs on the purchases of capital equipment for a new or expanding business.  All companies interested in these incentive programs can contact The Commission on Economic Development at (775) 687-4325 or at http://www.expand2nevada.com for an application.    NRS 372.397, NRS 374.357, NAC 372.040

Does Nevada have a voluntary disclosure program for Sales/Use Tax?

Yes, In accordance with NAC 360.440 through 360.448, a taxpayer may apply for voluntary disclosure with the Department which may result in waiver of penalty and interest. The Nevada Tax Commission has the final approval authority for the waiver. The taxpayer or his representative must file an application for voluntary disclosure before the Department has initiated an audit or investigation of the taxpayer. If a taxpayer is registered for one tax type and voluntarily discloses another tax type, they can qualify for waiver of the penalty and interest pertaining to the newly disclosed tax only.  The application for voluntary disclosure can be found by going to our website's forms section at:  http://tax.nv.gov/Forms/General_Purpose_Forms/

Is there a Sales/Use Tax exemptions for non-profit organizations?

Yes, but organizations are not automatically exempt by their Federal 501(c) status. Nevada Revised Statute (NRS) 372.326 provides for an exemption from Sales/Use Tax for non-profit organizations created for religious, charitable, or educational purposes, however, organizations must apply for, and receive approval for exempt entity status by the Department of Taxation. If an organization qualifies, it will receive a letter from the department stating it is exempt. The Application for Exempt Status is a two page form and can be downloaded by going to our Department's website at: http://tax.nv.gov/Forms/General_Purpose_Forms/   Automatically downloaded with the application are the related statutes that define the requirements for qualification. An exempt organization must renew its status every five years. Nevada state and local government agencies and agencies of the federal government are exempt by statute (NRS 372.325 & NAC 372.680), so an exemption letter from the Department is not required.

Where is my Sales/Use Tax Exemption number?

The Department has an approval process to review organizations applying for the religious/charitable/educational Sales/Use Tax exemption program. Upon approval, an exemption letter on Department letterhead with an exemption number will be issued then mailed to the qualifying organization.    NRS 372.3261

What is a "Resale Certificate” and how is it used?

If tangible personal property is being purchased for resale at retail, or to incorporate the property into a final product for sale or resale, that purchaser can provide the vendor with a "resale certificate". The certificate represents the purchaser's assurance that the property is for eventual resale and the tax will be charged then. The certificate must contain a general description of the kind of property purchased for resale and the buyer's and seller's name. If delivered electronically it does not have to be signed.  Out of State resale certificates are acceptable in Nevada as long as they contain the above mentioned requirements.

Where can I get blank “Resale Certificate”?

You can download a blank resale certificate by going to our Forms page on our Department's website: http://tax.nv.gov/Forms/General_Purpose_Forms/

How do I amend a Sales Tax Return I’ve already submitted?

Nevada does not have a specific form to amend your Sales Tax return. You may amend a previously filed Sales/Use Tax return by one of two methods:

Method A-Amend Individual Tax Returns:

1. Copy the Sales/Use Tax return for the period (month/quarter) in which sales/use was originally paid.
2. Write “AMENDED” in black, in the upper right hand corner of the tax return.
3. Line-through original figures for each county in which tax was originally reported, in black, leaving original figures legible.
4. Enter corrected figures, in black next to lined through figures.
5. Indicate amount of credit claimed.
6. Include a written explanation and documentation substantiating the basis of the credit claim.
7. Indicate whether a refund is requested or whether a credit will be used to meet current/future tax liability.

Method B-Spreadsheet to include:

1. Periods (months/quarters) in which tax was originally paid and county in which tax was originally reported.
2. Original tax measure and original amount of tax paid and county in which reported.
3. Corrected tax measure and corrected amount of tax due/credit claimed for each county where tax originally reported.
4. Total amount of tax credit claimed for all periods in all counties.
5. Include a written explanation and documentation substantiating the basis of the credit claim.
6. Indicate whether a refund is requested or whether a credit will be used to meet current/future tax liability.

How do I make a payment online?

Click 'Payments' on the left side of the page. This will take you to your business list. Choose the business that you want to make a payment for. This will then take you to the 'Make A Payment' screen. On this screen you have the option of making a payment or scheduling a payment.

Why do I still owe Sales Tax after I filed Chapter 7 bankruptcy?

The bankruptcy trustee is appointed to liquidate your nonexempt assets and pay your creditors according to the priority set by the bankruptcy code. Usually there are insufficient funds to cover your debts, which is why you filed for bankruptcy protection initially. A discharge is granted to provide you relief from your debts. However, a discharge only cancels those types of debts which are entitled to a discharge under the bankruptcy code. Often people are surprised to find that certain types of debts are exempt from the discharge and therefore collectible after the discharge is granted. Sales Tax is exempt from the discharge granted in bankruptcy because it is a priority tax debt.  Your liability for priority taxes is never canceled under a Chapter 7 discharge, because priority taxes (including penalty and interest) are a non-dischargeable debt under 11 U.S.C. sec 523 (a)(1)(A). This gives the Department the right to pursue collection of this debt once your discharge is granted.  If you filed a Chapter 13 debt adjustment or Chapter 11 reorganization, you would pay your priority taxes through your bankruptcy plan.  If your bankruptcy was dismissed or converted to a chapter 7, you would have to make arrangements with the Department to pay your remaining tax balance.  You should discuss any legal issues you may have with your attorney.