Tax in Nevada: a complete guide
This article provides an overview of state taxes in Nevada covering income, sales, and retirement taxes.
Summary
Nevada imposes zero state income tax – including on retirement income – which might attract people to the state.
Sales taxes are considerably higher than in other states.
The average property tax rate is lower than the national average.
A financial advisor can review your income sources and develop a unique tax strategy just for you.
What is the state income tax in Nevada?
Nevada has a reputation as one of the most tax-friendly states. Therefore, Nevadans who call the state home can take advantage of a comparatively relaxed approach to taxes.
There is no state income tax in Nevada.
Whether you work for a municipal agency or if you win big at one of the state’s many casinos, you won’t pay a penny in income tax. This also counts for retirement income.
Nevada residents will still need to pay federal income tax, of course.
Nevada’s 0% income tax couldn’t be more different from its neighbor to the west. Californians pay a tax rate of up to 12.3% – the highest in the country.
When it comes to state revenue, sales taxes are a large part of that equation.
What is sales tax in Nevada?
Nevada is home to the seventh-highest state sales tax in the US.
Nevada imposes a statewide sales tax of 6.85%, a max local sales tax rate of 1.53%, and an average combined state and local sales tax rate of 8.23%, according to the Tax Foundation.
As with many other states, there are exemptions to state sales tax.
Food is exempt from sales tax unless it is being served to eat right away, for example, at a restaurant. Newspapers and prescription drugs are also exempt from sales tax, as well as prosthetics and other medical equipment items.
Like many other states, Nevada also imposes excise taxes on alcohol and cigarettes. This means that visitors to hotspots like Vegas will pay a premium in extra excise duties if they enjoy cocktails, beers, or wines during their stay.
| Tax type | Rate | |
|---|---|---|
| Nevada wine tax | $0.70 per gallon | |
| Nevada beer tax | $0.16 per gallon | |
| Nevada liquor tax | $3.60 per gallon | |
| Nevada cigarette tax | $1.80 per pack of 20 cigarettes |
Vendors are responsible for paying the associated state excise tax, plus Federal excise taxes, for all wine, beer and liquor sold in Nevada.
How much is property tax in Nevada?
Property tax rates vary across Nevada’s 17 counties, and the amount of property tax paid depends on a property’s value.
According to Rocket Mortgage, Nevada has the ninth lowest effective property tax rate in the country at 0.59%.
Does Nevada have estate tax?
There is no estate tax and no tax on inheritance in Nevada.
How much is motor tax in Nevada?
Whether you’re just driving through Nevada on your road trip or if you’re a resident of the state, you’ll have to pay Nevada’s gas taxes.
Regular gasoline is taxed at $0.23 per gallon, and the tax on diesel is even higher, at $0.27 per gallon.
If you’re purchasing a car in Nevada, the sales tax rate is applied to all car dealerships in the state.
How much is retirement tax in Nevada?
It’s easy to see why retirees are attracted to Nevada, considering it has no income tax. Retirement income is also tax-free.
At a state level, retirees will not be taxed on Social Security or any payments from retirement savings accounts such as 401(k)s.
In addition to some medical equipment being exempt from the state sales tax, Nevada can be a very attractive place to retire from a tax perspective.
You can also check out the complete guide to retirement in Nevada here.
Get expert tax advice
If you want help developing tax strategies to keep more of your hard-earned income, a financial advisor can help.
They will work with you to create a tax plan and help you reduce your tax burden.
Find a financial advisor with Unbiased. Answer a few questions, and we’ll match you with an advisor perfectly suited to meet your needs.
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