Sales Tax & Use Tax in Las Vegas(Nevada State)
Q&A of Sales Tax & Use Tax in Nevada State
(Excerpted from Homepage of the Nevada Department of Taxation)
Q: I ordered some merchandise and they charged me Sales Tax on the delivery charges. Is this correct?
A: Yes. In Nevada, any charges for freight, transportation or delivery in connection with the sale of tangible personal property is subject to sales and use taxes, even if stated separately on the invoice of the seller. A charge for freight, transportation or delivery is not taxable if: (1) freight is invoiced to the purchaser by a freight carrier and title to the property passes before shipment, (2) freight is not connected with the sale of tangible personal property or (3) freight is part of a sale of tangible personal property which is exempt from Nevada Sales Tax. Nevada Administrative Code (NAC) 372.101
Q: How do I know what is taxable?
A: Nearly all tangible personal property transferred for value is taxable. This includes property purchased for lease or rent. Most goods, wares, and merchandise are taxable in Nevada. Services associated with the sale of tangible personal property may also be taxable. Only installation and repair/reconditioning service is not taxable if it is separately stated on the invoice. Most food purchases of unprepared or uncooked food is not taxable. You may write to the Department of Taxation at any of the District offices about the taxability of a specific item.
Q: Can be included in the price of a purchased item?
A: Yes. However, it must be specifically and clearly stated that "Nevada Sales Tax is included" in the price paid. A retailer may include the tax in the sales price of an item but if he does so, he shall notify the public by posting a sign which is visible to all customers and states that the Sales Tax is included in the sales price. In the absence of such a notification, the total amount charged to the customer shall be deemed to be the price of the item. NAC 372.760
Q: Is the lease or rental of tangible personal property taxable?
A: Yes. A Use Tax is due from the lessor on all property put into lease or rental service. An option is given on how to pay this tax. Sales or Use Tax can be paid on the total cost at time of purchase, or Use Tax can be paid on the total lease or rental charges within this State. NRS 372.060, 372.085, 372.105, 372.185 NAC 372.070-372.085
Q: I am bidding a job in Nevada. Do I charge tax on the total charge for materials and labor?
A: In Nevada, the taxability of labor varies, depending on the type of labor, and in some instances, how it is billed to the customer. Fabrication labor is subject to Sales/Use Tax. Repair/reconditioning and installation labor is not subject to tax if it is separately stated on the invoice. Nevada Administrative Codes 372.380, 372.390-372.400 and Nevada Revised Statutes 372.025 and 372.065
Q: I am starting a consulting business in Nevada. Is this subject to Sales Tax?
A: In Nevada, Sales/Use Tax is imposed on the sale, transfer, lease, rental, use, or other consumption of tangible personal property for consideration. Services do not fall under the definition of tangible personal property and are not subject to Sales Tax. The provider of the services has a Use Tax liability on the materials used/consumed in providing the service. Nevada Revised Statute 372.085, 372.105, and 372.185
Q: I over paid my Sales Tax last month. Where do I get the form to amend my Sales Tax return? How do I get a refund?
A: 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.
Q: I will be attending a convention/trade-show in Nevada. I will be selling my product. Do I have to collect Sales Tax?
A: Any business conducting more than two retail sales of tangible personal property during any twelve-month period must register with the Nevada Department of Taxation to collect and remit Nevada Sales/Use Tax. If this is a one-time event, you are not required to register to collect and remit Nevada Sales/Use Tax. Convention organizers/promoters may provide you with a simplified version of a Nevada Sales/Use Tax return. The organizer/promoter collects the tax due at the end of the convention and remits it directly to the Department. If the convention organizer/promoter does not provide a simplified tax return, you must remit the tax directly to the Department in letter form. The letter must include the name, date and location of the event; the name, address and federal identification number of your business, amount sold and tax collected. Checks must be made payable to the Nevada Department of Taxation. Please mail your letter and payment to Nevada Department of Taxation 1550 College Parkway, Suite 115, Carson City, Nevada 89706. Nevada Revised Statue 372.050, 372.055, 372.060, 372.105 and Nevada Administrative Code 372.180
Q: Does Nevada provide for Sales/Use Tax exemptions for non-profit organizations?
A: Yes, 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. Organizations are not automatically exempt by their Federal 501(c) (3) status. The Application for Exempt Status is a short, one page form, and can be downloaded. Automatically downloaded with the application are the related statutes that define the requirements for qualification. If approved, 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). An exemption letter from the department is not required. Such entities do not need to apply to the department for an exemption letter. Click here to go to forms to download the application.
Q: What is the Sales Tax rate on a new car? I think the dealership undercharged me.
A: Nevada statutes provide for a "tax credit" based on the trade-in allowance of a used car in connection with the sale of a new car. The following approach is used to calculate the total Nevada Sales Tax due on a new car deal when a trade-in is involved: 1. Multiply the full retail price of the new car (including document, smog and other fees) by the Sales Tax rate applicable in the county of the sale. 2. Multiply the trade-in allowance by the applicable tax rate in the county of sale. 3. Deduct (2) from (1) to arrive at the total amount of tax due. For example, You buy a $15,000 new car and receive $10,000 in trade-in allowance for your old car. The tax would be ($15,000 x 7%) - ($10,000 x 7%) = $350 total Sales Tax due. (Assuming a 7% applicable Sales Tax rate).
Q: I paid Sales Tax for my purchase to another state. Will I have to pay tax on the same purchase to Nevada?
A: Nevada does recognize Sales Tax paid to another state, and will credit the amount legitimately paid up to the amount of tax due in Nevada. If tax was paid at a lesser rate than Nevada's, tax is due on the difference between the two rates. NAC 372.055
Q: Are boats, vehicles, aircraft, and off highway vehicles purchased in another state subject to Nevada tax?
A: They may be. In order to be registered in Nevada, proof that Sales Tax has been paid to Nevada or another state is required on all boats, licensed vehicles (cars, trucks, motorcycles, trailers) aircraft and off highway vehicles. If proof cannot be provided, Use Tax must be paid. Sales Tax legitimately paid to another state is applied as a credit towards Nevada Use Tax due. NAC 372.055, NRS 372.185
Q: Does Nevada offer incentive programs for Sales/Use Tax?
A: 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
Q: Don't all companies automatically add Sales Tax to taxable mail order, out-of-state, and telephone purchases?
A: Not necessarily. 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 Use Tax directly to the State of Nevada.
Q: Is software, electronic magazines, clipart, program code, or other downloaded material taxable to Nevada residents?
A: No. Products from the internet, BBS, or other networks downloaded directly onto your computer (home or office) 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 (floppy, CD-ROM, etc). A box of software or other product shipped to customers in this state is physical, tangible personal property. Electronic download of software and other information is not currently viewed as 'physical'.
Q: I just received a notice to post security from your department. How did the department arrive at the amount that needs to be posted?
A: A person who obtains a permit to collect Sales Tax shall deposit with the department security in an amount equal to twice the estimated average tax due quarterly, or three times the estimated average tax due monthly if he files monthly returns, but not less than $100.00. Any person who becomes delinquent or files a late return or whose check tendered as payment is dishonored shall deposit additional security with the department. The department shall require a habitually delinquent taxpayer to deposit with the department security in an amount equal to three times the average actual tax due quarterly or five times the average actual tax due monthly. The department will accept cash, time certificates or certificates of deposit that are issued or confirmed by a bank, savings bank or savings and loan association situated in this state, surety bonds executed by an insurance company and irrevocable letters of credit which are issued or confirmed by a bank, savings bank or savings and loan association situated in the State of Nevada upon the conditions prescribed by the department. NRS 372.510, NAC 372.825
Q: My business is located in Carson City where the tax rate is currently 7%, and on my first day of business my register was mis-programmed for 7.25%. Can I keep the excess tax collected?
A: No. Any over-collection must, if possible, be refunded by the retailer to the person from whom it was collected. Any over-collection that cannot be refunded for any reason must be paid to the department. If a retailer receives notice from the department that they have over collected Sales Tax and a refund must be made, they must use all practical methods to determine the amount to be refunded, and the name and address of the person to whom the refund is to be made. Within 60 days after receiving notice from the department that a refund must be made, they must make an accounting to the department of all refunds paid. The accounting must be accompanied by any supporting documents required by the department. NAC 372.765
Q: Are beer, wine, and liquor subject to Sales Tax?
A: 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
Q: I purchased a boat and trailer from an out-of-state dealer. Do I have to pay Nevada Sales Tax to operate it on a Nevada lake?
A: Nevada does honor Sales Tax paid to another state in an amount equivalent to Nevada's. If you purchased a boat/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 (Department) for tax clearance. After receiving proof of tax paid from the Department, you may then proceed to the Department of Motor Vehicles and the Division of Wildlife to complete the required registration. NAC 372.055
Q: Is a wholesale distributor of exempt food products require to register as a vendor?
A: Yes, all persons making sales in the State of Nevada must be registered with the Nevada Department of Taxation for a Sales/Use Tax permit whether the product being sold is exempt or not. A seller is defined in NRS 372.070. In addition, any person that performs a service or engages in a trade for profit in Nevada must have a State Business License issued by the Department of Taxation. The fee for a Sate Business License is $100 a year. This is in addition to any license to conduct business that must be obtained from the local jurisdiction in which the business is being conducted NRS 360.780
Q: A large computer reseller, not located in Nevada, charged me tax on the purchase of a computer system over the internet. They cannot explain to me what the tax is, but they said it is 7% and it is a “Nevada Tax". Is there any such tax? I think that since it is strangely at the same rate as Sales Tax (7%) that they are charging me Sales Tax.
A: If the company is located in Nevada, they must register with the Department of Taxation to collect and remit Sales/Use Tax. If they are not located in Nevada, they may register as a courtesy to their customers to collect and remit Sales Tax. In addition, because Nevada is a member of the “Streamline Sales Tax Agreement” along with other States, many businesses not located in Nevada, are registered through the Streamline Sales Tax Agreement and do collect and remit Nevada Sales Tax to this State. Please contact the Department here to inquire if a company is registered to collect Nevada Sales/Use Taxes.
Q: If I purchase items from an out of state vendor in Texas and pay no Sales Tax to the vendor and then resell and ship the items to an out of state customer through a web site or internet auction, what taxes are due Nevada Department of Taxation?
A: Sales of tangible personal property made to and shipped to out-of-state customers are not subject to Nevada Sales/Use Tax. Sales Tax must be collected on any sales made to Nevada customers, no matter how the sale is initiated. Additionally, If your business in located in Nevada you must obtain a State Business License (with a few exceptions, please see the State Business License topic) and any business that has employees working in Nevada is required to pay the Modified Business Tax.