Sales Tax FAQs

Sales Tax FAQs

Table of Contents

What is Sales Tax?

  • Sales Tax in Nevada is a legal requirement applied to the sale, transfer, barter, licensing, lease, rental, use, or consumption of tangible personal property.
  • It was first introduced in 1955.

Who needs to pay Sales Tax?

  • Anyone in the business of selling or transferring tangible personal property is required to pay Sales Tax.

When must Sales Tax be paid?

  • Sales Tax is due at the time of the sales transaction, regardless of when the retailer receives payment from the customer.

What items are subject to Sales Tax in Nevada?

  • In Nevada, most tangible personal property transferred for value is taxable.
  • This includes most goods, wares, and merchandise.
  • Services that are necessary for completing the sale of tangible personal property are also taxable.

Are any services or items exempt from Sales Tax?

  • Non-taxable items include unprepared food, farm machinery and equipment, newspapers, and finance charges on credit sales.
  • Installation and repair/reconditioning services are not taxable if they are listed separately on the invoice.
  • As of May 2009, transportation, shipping, and postage charges also aren’t taxable if they’re separately stated on the invoice.
  • For example, if a business in Reno sells a refrigerator and charges for delivery on the same invoice, but lists the delivery charge separately, the delivery fee is not subject to Sales Tax. The sale of the refrigerator, however, is taxable.

How can I find out if a specific item is taxable?

  • For questions about the taxability of specific items, you can write to the Nevada Department of Taxation.

Are delivery charges taxable in Nevada?

  • Since May 22, 2009, delivery charges, including freight and transportation costs, associated with the sale of tangible personal property, are not taxable if they are listed separately on the invoice to the end user, according to AB403.
  • However, any handling, packaging, crating, or other services related to delivery are taxable, even if separately stated.

Are charges for freight or transportation before a sale taxable?

  • Yes. Charges for freight or transportation incurred before the sale of tangible personal property (in-bound freight) are taxable.
  • They can be included in the product’s sales price or listed as a separate freight charge on the invoice to the end user.

Is leasing or renting tangible personal property subject to Sales Tax?

  • Yes, Sales Tax must be paid by the lessee on all leased or rented tangible personal property.

The lessee has two options for paying this tax:

  1. Either pay Sales Tax on the total cost at the time of purchasing the property for lease, or
  2. Collect Sales Tax from the customer on all lease or rental charges within the state, as outlined in NRS 372.060, 372.085, 372.105.

Is labor subject to Sales Tax?

  • Fabrication labor, which is labor involved in creating tangible personal property sold at retail, is taxable.
  • However, repair, reconditioning, and installation labor are not taxable if these services are listed separately on the invoice, according to NAC 372.380, 372.390-372.400 and NRS 372.025 and 372.065.

Is consulting work subject to Sales Tax in Nevada?

  • In Nevada, consulting services, as services not tied to the sale of tangible personal property, are not subject to Sales Tax.
  • However, consultants might owe use tax on any materials or equipment used in their services if those items were purchased without Sales Tax, as per Nevada Revised Statute 372.085, 372.105, and 372.185.

Are vehicles, aircraft, and off-highway vehicles bought in another state subject to Nevada’s Sales Tax if they’re used or stored in Nevada?

  • Yes, if these items are intended for use or storage in Nevada, they are subject to Sales Tax.
  • To register these vehicles or aircraft in Nevada, you must show proof that Sales Tax was paid in Nevada or another state.
  • If there’s no proof of Sales Tax payment, Nevada’s use tax must be paid.
  • Any Sales Tax paid to another state can be credited against the Nevada use tax owed, according to NAC 372.055 and NRS 372.185.

Is Nevada Sales Tax required on the purchase of a boat?

  • Yes, if the boat is intended for use or storage in Nevada, Sales Tax must be paid.
  • Nevada recognizes Sales Tax paid to another state if it’s equivalent to Nevada’s rate.
  • If you’ve already paid Sales Tax on a boat and trailer to an out-of-state dealer at a rate equal to Nevada’s, you’ve met your obligation.
  • If the rate was lower, you’ll need to pay the difference to Nevada.
  • If no Sales Tax was paid at the time of purchase, you owe Nevada sales/use tax on the total purchase price, including accessories.
  • To pay the tax, bring all necessary documents to the Nevada Department of Taxation for a tax clearance, then go to the Department of Motor Vehicles for trailer registration and the Division of Wildlife for boat registration, as per NAC 372.055.

Are beer, wine, and liquor subject to Sales Tax in Nevada?

  • Yes, the retail sales of beer, wine, and liquor are subject to Sales Tax on the total amount charged, including any state and federal taxes on the product, as per NAC 372.150.

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

  • Sales of postage stamps from vending machines are not taxed because they are considered an intangible right to services, not tangible personal property.
  • However, coins and uncanceled stamps sold at a premium price (over 50% of their face value) for purposes other than as currency or postage are subject to Sales Tax.
  • Sales of coins or uncanceled stamps are not taxed if they will be used as currency or postage, according to NRS 372.085 and NAC 372.170.

Is software, electronic magazines, clipart, program code, or other downloaded material subject to Sales Tax in Nevada?

  • No, products delivered electronically, such as software, electronic magazines, clipart, and program code, are not subject to Nevada Sales or Use Tax.
  • However, physical items ordered online and shipped to Nevada, including software on a disk, are taxable because they are considered tangible personal property.

Do all purchases from mail order, out-of-state, internet, and phone transactions automatically include Nevada Sales Tax?

  • No, only transactions with companies registered to collect Nevada Sales Tax include it automatically.
  • If a seller isn’t registered to collect Nevada Sales Tax, Nevada buyers are responsible for paying Use Tax directly to the state.

What is the purpose of the Streamlined Sales Tax?

  • The Streamlined Sales Tax initiative aims to simplify the complexity of state Sales Tax systems, addressing the U.S. Supreme Court’s ruling that states can’t require sellers without a physical presence in the state to collect Sales Tax due to the system’s complexity.
  • This effort led to the creation of the Streamlined Sales and Use Tax Agreement, designed to modernize and simplify sales and use tax administration to significantly lessen tax compliance burdens.
  • The agreement seeks to improve tax systems for all sellers across all forms of commerce.

Are there any incentive programs for Sales/Use Tax in Nevada?

Is there a voluntary disclosure program for Sales/Use Tax in Nevada?

  • Yes, Nevada offers a voluntary disclosure program for taxpayers, which, under NAC 360.440 to 360.448, can lead to a waiver of penalties and interest. The Nevada Tax Commission must approve these waivers.
  • Applicants or their representatives must submit a voluntary disclosure application before the Department starts an audit or investigation.
  • Taxpayers already registered for one tax type who disclose another tax type voluntarily may have penalties and interest waived for the newly disclosed tax.
  • The application for voluntary disclosure can be downloaded here.

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.
  • Download the Application for Sales Use Tax Exemption
  • See the forms section of Sales Tax Types for more information and a description of the Tax Exemption.
  • 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”?

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:

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

Method B-Spreadsheet to include:

  • Periods (months/quarters) in which tax was originally paid and county in which tax was originally reported.
  • Original tax measure and original amount of tax paid and county in which reported.
  • Corrected tax measure and corrected amount of tax due/credit claimed for each county where tax originally reported.
  • Total amount of tax credit claimed for all periods in all counties.
  • Include a written explanation and documentation substantiating the basis of the credit claim.
  • 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?

  • Pay online at the Nevada Tax Center.
  • Login, or register and create an account if you do not have one.

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.

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

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