Consumer Use Tax FAQs

Consumer Use Tax Frequently Asked Questions (FAQs)

What is Consumer Use Tax?

  • Consumer Use Tax, also known as Use Tax, is similar to Sales Tax but is applied to the storage, use, or consumption of tangible personal property bought from a retailer in Nevada.
  • If the Sales Tax has already been paid on the property, Consumer Use Tax does not apply.
  • Refer to Nevada Revised Statutes (NRS) 372.185 and Nevada Administrative Code (NAC) 372.055 for additional legal information.

What is Use Tax?

  • Use Tax and Consumer Use Tax generally refer to the same concept.
  • These terms are often used interchangeably.

When Does Consumer Use Tax Apply?

  • Consumer use tax applies to property bought outside of Nevada without paying sales tax, which is then used, stored, or consumed in Nevada.
  • This includes purchases made through mail order, out-of-state retailers, toll-free “800” numbers, and online purchases where Nevada Sales Tax hasn’t been paid.
  • Examples include: 
    • Buying a desk from an online store based in another state without paying Nevada Sales Tax.
    • Purchasing equipment from an out-of-state vendor through a toll-free number and having it shipped to Nevada.
  • Sales Tax paid in another state can be credited against the Nevada Consumer Use Tax due.

What is the Consumer Use tax rate?

  • The rate for Consumer Use Tax is the same as the Sales Tax rate in the county where the property is used.

Is Consumer Use Tax something new?

  • No. Taxpayers are often less familiar with Consumer Use Tax than with Sales Tax. Nevada first imposed a Consumer Use Tax in 1955.
  • All states which impose a Sales Tax also impose a companion Consumer Use Tax.

Why is Consumer Use Tax important?

  • Nevada Consumer Use Tax is important because it protects Nevada businesses from a competitive disadvantage with out-of-state vendors.
  • If a Consumer Use Tax provision did not exist, Nevada businesses would be undercut by out-of-state vendors.
  • Consumer Use Tax puts in-state and out-of-state businesses on the same competitive footing.
  • Consumer Use Tax also helps generate the funds needed to provide services such as police and fire protection, road construction and repair, and it funds schools.

Who is liable for Consumer Use Tax?

Any individual, business, corporation, or other entity is liable for Consumer Use Tax, when Sales Tax is not collected by the seller and the item is delivered in Nevada. Consumer Use Tax is not just applicable to businesses.

Below are examples in which Nevada Sales Tax is not collected by the seller and therefore, Consumer Use Tax is due from the purchaser:

  • An individual orders furniture from an out-of-state dealer who delivers or ships it to a location in Nevada
  • An individual purchases clothing, shoes, or accessories from an internet site that delivers or ships the items to a Nevada resident
  • An individual purchases an off-highway vehicle in another state and signs an affidavit in the state affirming that the vehicle will be used and stored in Nevada.
  • An out-of-state resident purchases a vehicle, vessel, or aircraft from an out-of-state dealer who delivers the property to Nevada to be used by the individual or individual’s company operating in Nevada
  • A contractor orders a truckload of sheet rock from an out-of-state vendor who delivers or ships the sheet rock to Nevada for the contractor’s construction job in Nevada
  • A Nevada business orders a computer system from an out-of-state dealer who delivers or ships the system to the Nevada business address
  • A Nevada business orders equipment, reference materials, office supplies, or furniture from an out-of-state vendor to be used in Nevada

Don’t all companies automatically add Sales Tax to taxable out-of-state, internet, mail order, and telephone purchases?

  • No. Some companies do because they are registered to collect Nevada Sales Tax.
  • If a seller is not registered to collect and remit Nevada Sales Tax, the Nevada purchaser must pay Consumer Use Tax directly to the Department of Taxation.

Is there a credit for Sales or Use Tax paid to another state?

  • Yes. Nevada does recognize Sales Tax paid to another state.
  • However, if the Sales Tax paid is less than the rate in the Nevada county then the difference needs to be reported as Consumer Use Tax.

How do I know what is taxable?

  • Taxable items are tangible personal property transferred for value.
  • This includes property purchased for lease or rent, other than real estate.
  • Most goods, wares and merchandise are taxable in Nevada. Unprepared food is exempt.

How do I report and pay Consumer Use Tax if I am not a retailer or in business?

  • Consumer Use Tax, of a person not in business, is reported on a one-time consumer use tax return.
  • Non- retail businesses that hold a State Business License must report and pay Consumer Use Tax with their yearly or quarterly Consumer Use Tax Return.
  • Consumer Use Tax can also be satisfied by sending a letter or invoice stating the purchase price and submitting the Consumer Use Tax payment at the same rate as the sales tax.
  • Learn more at Consumer Use Tax Types.

How do I apply for a consumer use tax permit?

  • Those who regularly pay Consumer Use Tax should apply for a Consumer Use Tax Certificate if they don’t already have a sales permit.
  • There is no charge for a consumer use tax permit.
  • Option 1: If you’re not a retailer, apply for a Consumer Use Tax Permit at the Nevada Tax Center.
    • You’ll receive the permit ID# within 24 hours if you apply online.
  • Option 2: You can use the Nevada Business Registration Form – Download to apply for a Consumer Use Tax Permit.
    • Return this form by mail to:
      Department of Taxation, 3850 Arrowhead Dr., 2nd Floor, Carson City NV 89706*
    • Please allow several weeks for the consumer use tax permit ID# when using this form, or longer if payment is not received at the same time as the form.

What if Consumer Use Tax is not paid?

  • The Department of Taxation may issue an assessment for Consumer Use Tax liability.
  • Interest will be imposed at the rate of 1% per month prior to July 1, 2011 and .75% effective July 1, 2011 and after.
  • A penalty of no more than 10% per month will also be assessed in addition to the tax. If there is evidence of intent to evade Consumer Use Tax, a 25% penalty can be assessed.
  • If the intent to evade Consumer Use Tax pertains to a vehicle, vessel, or aircraft, a 300% penalty can be assessed.

How does the Department of Taxation identify those who have Consumer Use Tax liability?

  • The Department can identify those who owe Consumer Use Tax by various methods.
  • These include routine audits, special audits, self-assessment programs, complaints, reports, investigations and by obtaining lists of out-of-state purchases through the cooperation of vendors and taxing authorities in other states.

I am a contractor bidding a job in Nevada. Are both the materials and labor subject to tax?

  • In Nevada, construction contractors are considered the end consumers of all materials used in their construction projects, even when working for an exempt entity.
  • Contractors must pay either Sales Tax or Use Tax on the materials they use.
  • If the contractor already paid Sales Tax at a rate equal to or higher than Nevada’s rate, no additional tax is owed.
  • The Nevada Department of Taxation allows a credit for Sales Tax paid to other states or local governments, reducing the tax due in Nevada by the amount already paid elsewhere.

  • If the Sales Tax paid in another state is less than Nevada’s rate, the contractor must pay Consumer Use Tax on the difference between the two rates.

I am a contractor doing a job for a governmental agency, how do I buy my materials tax exempt?

  • Nevada Sales Tax exempt status given to governmental, religious, charitable, or educational entities does not extend to contractors or sub-contractors with whom they contract.

Are boats, watercraft, motor vehicles and off highway vehicles purchased in another state through mail order, over the internet and toll free “800” numbers subject to Nevada tax?

  • Yes. In order to register or operate all boats, watercraft, off highway vehicles and motor vehicles (cars, trucks, and motorcycles) in Nevada, proof that Sales Tax has been paid to Nevada or another state is required.
  • If proof cannot be provided, Consumer Use Tax must be paid.

Do retailers also owe Consumer Use Tax?

  • Yes. Any purchase, other than inventory, made by a retailer from a non-registered vendor, for use in the business, is subject to Consumer Use Tax and must be reported on the monthly or quarterly Sales and Use Tax return.
  • Examples of this are supplies, forms, or equipment that is not re-sold. Any items taken from inventory for use in the business are also subject to Consumer Use Tax.
  • Any items given away for free as part of doing business are subject to Consumer Use Tax payable by the business giving it away.
  • However, effective July 1, 2007, items with a nominal value that are given away at conventions, trade shows, & public events are not subject to Consumer Use Tax.

Read the Consumer Use Tax Q and A in Spanish.

Note: FAQs are for general guidance only. For written advice as it relates to your business, request an advisory opinion from the Department.

More Information

▲ Back to Top