Miles Consulting continues to help clients in other states, so this week we dedicate some time to Nevada.
Business Climate:
Nevada conjures up images of bright lights, gambling, and other entertainment. But we’re blogging about state taxes! According to the 2014 State Business Tax Climate Index, Nevada ranks very favorably due to an absence of several taxes. Some of the taxes not levied include individual income tax, franchise tax, and corporate tax. Nevada also offers many credit and incentives programs that attract employers to increase their workforce. The combination of low taxes and incentives makes Nevada a hot spot for new and existing businesses. Companies like Amazon and Urban Outfitters elected to create fulfillment centers in the Northern Nevada area for these very reasons. The geographic location of Nevada is still within close proximity to California markets without the burden of a high tax structure.
Key industries within the state include manufacturing, aerospace/defense, mining, tourism, gaming, and hospitality. As of 2014, there are roughly 381,800 jobs within the tourism & gaming industry. Nevada is an ideal location for manufacturing due to its proximity to ports in California. The industry currently has over 1,800 manufacturing companies which employ over 56,000 residents of Nevada. The state-wide unemployment rate in April 2014 was 8.0% and has been decreasing due to the addition of 42,700 private sector jobs added within the first four months of 2014.
Taxes:
Although it has no income tax, Nevada generates significant tax revenue through sales tax and gaming tax. Currently the sales tax rate is 6.85% and depending on particular municipalities can be as high as 8.1%. Gaming tax is incurred from the revenue casinos generate and is taxed on a graduated rate. The maximum rate is 6.75%. In 2012, the state generated $885 million from gaming tax and $967 million from sales tax.
Another unique tax linked to Nevada is the Live Entertainment Tax, which began in 2004. The tax is imposed on facilities with capacities of 200 or more seats where live entertainment is provided and admission is charged. There is a 10% tax per admission for venues with capacities between 200-7,500 patrons and a 5% tax for capacities over 7,500. Live Entertainment can be defined as music, dancing, acting, acrobatics, animal stunts, and many more. In 2012-2013, the total collections from the Live Entertainment Tax were over $11.7 million.
Tax Credits & Incentives:
Nevada’s tax credits and incentives are in the best interest of both the companies and their employees. Below are a few credits and incentives that companies have taken advantage of within Nevada:
Silver State Works: The purpose of this program is to revitalize Nevada’s economy through the hiring and retaining of qualified employees. Qualified employees include veterans, unemployment insurance recipients, and persons with disabilities. A specific component of the program is called the “Incentive Based Employment,” which awards the company a $2,000 bonus for hiring and retaining new qualified full-time employees.
Real Property Tax Abatement for Recycling: This abatement entitles companies to partial abatement of real and personal property taxes up to 50% of the tax due for up to 10 years. To qualify the business must either recycle at least 50% of the materials onsite or primarily generate electricity from recycled material. Recycled material includes industrial, domestic, agricultural or municipal waste.
Renewable Energy Sales & Use Tax Abatement: Companies that generate electricity from renewable energy sources such as solar, wind, hydro power, etc., are eligible for a partial sales tax abatement. When qualified purchases are made the company is only required to pay sales and use tax at a reduced rate just above 2.0%.
Random Nevada Facts:
- The MGM Grand’s linen department washes over 15,000 sets of sheets a day.
- In 2013, almost 2 million of the state’s 2.7 million population lived within Clark County, and about 588,000 lived in Las Vegas.
- In 1931 the Pair-O-Dice Club was the first casino to open on Highway 91, the future Las Vegas Strip.
- Nevada is the seventh largest state with 110,540 square miles, 85% of them federally owned including the secret Area 51 near the little town of Rachel.
- Nevada has more mountain ranges than any other state, with its highest point at the 13,145 foot top of Boundary Peak near the west-central border.
- Construction worker hard hats were first invented specifically for workers on the Hoover Dam in 1933.
(Photo credit – Marco Verch via Flickr)
