Consumer Use Tax

Consumer Use Tax

The Consumer Use Tax in Nevada serves as a counterpart to the Sales Tax, for situations where tangible personal property is purchased without Nevada Sales Tax being applied.

Consumer Use Tax is not imposed when the sales of the property to the consumer is subject to the Sales Tax.

Consumer Use Tax, the counterpart of Sales Tax, is imposed upon the storage, use or other consumption in this State of tangible personal property purchased from a retailer. Consumer Use Tax is not imposed when the sales of the property to the consumer is subject to the Sales Tax.
See also Sales & Use Tax for additional forms or if you need to file Sales & Use Tax together.

For the most part, Consumer Use Tax rather than Sales Tax, applies to:

  • Property purchased ex-tax outside of Nevada for storage, use or other consumption in Nevada from other than a seller registered in Nevada.
  • Mail order, out-of-state, toll-free “800” numbers and purchases made on the internet.
  • Other purchases of tangible personal property on which Nevada Sales Tax has not been paid.

Consumer Use Tax ensures that purchases made outside of Nevada do not unfairly compete with in-state retailers who are required to collect sales tax.

Consumer Use Tax generates state revenue from purchases that otherwise would not contribute to state funds through sales tax.

Consumer Use Tax ReturnXLS

  • Who should use it: Businesses that do not sell tangible personal property and therefore do not collect sales tax (e.g., construction contractors), or individuals who have made purchases where Nevada sales tax was not collected.
  • Purpose: To report and pay Consumer Use Tax on taxable items purchased for use, storage, or consumption in Nevada where sales tax has not been paid.

Reporting and Payment

  • Individuals: Residents typically report and pay Consumer Use Tax annually when they file their state tax returns, declaring purchases made without sales tax.
  • Businesses: Companies must account for Consumer Use Tax on applicable purchases and typically report this when they file their regular sales tax returns.

Resale Certificate

  • Who Should Use It? Businesses that purchase goods for resale and do not wish to pay sales tax on those goods at the time of purchase.
  • Purpose: To prove eligibility to purchase goods tax-free that will be resold in the normal course of business.
  • Frequency: Issued by the buyer to the seller at the time of purchase; must be renewed periodically as per state regulations.

Application for Sales Use Tax Exemption (RCE)

  • Who Should Use It? Nonprofit organizations, government entities, and other qualifying organizations seeking exemption from sales and use tax.
  • Purpose: To apply for a certificate that exempts the organization from paying sales tax on eligible purchases.
  • Frequency: Application is typically a one-time submission unless there are significant changes to the organization’s status or operations that might affect its exemption.

Nevada Business Registration

  • Who Should Use It? Every new business intending to operate in Nevada, including corporations, partnerships, sole proprietors, and other entity types.
  • Purpose: To register the business with the Nevada Department of Taxation and other state agencies, ensuring compliance with tax, licensing, and employment laws.
  • Frequency: This is a one-time requirement when starting a business. Updates are needed only if business information changes.

Consumer Use Tax Rate: The Consumer Use Tax rate is the same as the sales tax rate applicable in the buyer’s local area, including any local surcharges (see below).

  • Out-of-State Purchases: Consumer Use Tax is applied to items purchased tax-free from out-of-state retailers, which includes transactions over the internet, through mail order, or via toll-free numbers (like “800” numbers).
  • Exclusions: If the sales tax was already paid on the property at the time of purchase, Consumer Use Tax does not apply.

Sales Tax Rate: The base state sales tax rate in Nevada is 6.85%. However, local jurisdictions can add additional taxes, which can make the total sales tax rate vary significantly from one area to another.

  • Applicable Transactions: Sales tax applies to most retail sales of goods and many services. Certain items like food for home consumption and prescription medications are typically exempt.

  • Online Purchases: If a Nevada resident buys a computer from an online retailer based in another state, and no sales tax is charged, Consumer Use Tax would apply when the computer is used in Nevada.
  • Mail Order: Purchasing furniture through a mail-order catalog from a company that does not charge Nevada sales tax would also be subject to Consumer Use Tax if the furniture is used in Nevada.
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