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Nevada Tax Guide: No State Income Tax

Discover why Nevada's zero income tax and moderate other taxes make it a top destination for tax-conscious residents.

None
Income Tax Rate
8.23%
Combined Sales Tax
0.55%
Property Tax Rate
#42
Tax Burden Rank

Tax Overview

Nevada is one of the most tax-friendly states in the nation, with no state income tax on individuals. This applies to all forms of income, including wages, investment gains, retirement distributions, and business income. Nevada's constitution prohibits a state income tax, making it very difficult to change this policy. The state funds its government primarily through sales taxes, gaming taxes, and mining taxes.

Sales tax in Nevada has a state rate of 6.85%, with local additions that push the combined rate above 8% in Clark County (Las Vegas) and Washoe County (Reno). While the sales tax burden is significant, the absence of income tax more than compensates for most residents. Nevada exempts groceries and prescription drugs from sales tax.

Property taxes in Nevada are moderate, with effective rates around 0.55%. The state caps annual property tax increases at 3% for primary residences and 8% for other property through a tax abatement program. Nevada also offers property tax exemptions for veterans and senior citizens. The combination of no income tax, moderate property taxes, and the entertainment-driven economy makes Nevada particularly attractive for retirees and high-income earners.

Income Tax

No State Income Tax

Nevada constitutionally prohibits a state income tax on individuals. All personal income, including wages, investments, and retirement distributions, is exempt from state taxation.

Sales Tax

State Rate6.85%
Avg. Local Rate1.38%
Combined Rate8.23%

Property Tax

Effective Rate0.55%
Median Annual Bill$1,749

Key Deductions in Nevada

  • ✓No state income tax means no state deductions needed
  • ✓Property tax abatement (3% cap on primary residence increases)
  • ✓Veterans property tax exemption
  • ✓Senior citizen property tax assistance
  • ✓No estate or inheritance tax
  • ✓No franchise tax on individuals

Filing Information

Filing Deadline: N/A (no state income tax)

Tax Authority: Nevada Department of Taxation

Phone: (866) 962-3707

Website: https://tax.nv.gov

Frequently Asked Questions

Will Nevada ever have a state income tax?
It is highly unlikely. Nevada's Constitution explicitly prohibits a state income tax on individuals. Changing this would require a constitutional amendment, which would need to pass in two consecutive legislative sessions and then be approved by voters.
How does Nevada fund its government without income tax?
Nevada relies on sales taxes, gaming taxes, commerce taxes on businesses, mining taxes, and various fees. The state's large tourism and gaming industries generate substantial tax revenue that reduces the need for a personal income tax.
Is Nevada good for retirees?
Yes, Nevada is excellent for retirees from a tax perspective. There is no state income tax on any retirement income (Social Security, pensions, 401k, IRA), no estate tax, and property taxes are moderate with protections against large annual increases.
Does Nevada have any business income taxes?
Nevada does not have a traditional corporate income tax, but it imposes a Commerce Tax on businesses with gross revenue exceeding $4 million. This is a gross receipts tax, not an income tax, and it applies at varying rates by industry.

Neighboring State Guides

CaliforniaOregonIdahoUtahArizona

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