Nevada is the 7th most extensive, the 35th most populous, and the 9th least densely populated of the 50 United States (only 2.9 million residents). Nearly three-quarters of Nevada's people live in Clark County, which contains the Las Vegas–Paradise metropolitan area where the state's three largest incorporated cities are located.
Nevada is officially known as the "Silver State" due to the importance of silver to its history and economy. But in reality gold has played a bigger role, Nevada is the largest gold-producing state in the nation, and in fact on a historical basis is the 2nd largest gold production location in the world, close behind South Africa. Speaking of Gold, the U.S. Mint located in Carson City produced more ‘gold’ and ‘silver coins’ during our nation’s history, with the Denver Mint coming in a distant 2nd.
Nevada's capital is Carson City, named for the river flowing through the city which in was in fact named after the mountain man Kit Carson. There are a couple of unique things about the ‘Consolidated Municipality of Carson City,’, prior to 1969 Carson City was also the county seat of Ormsby County Nevada but the City and County were merged together. The city limits today extends across the Sierra Nevada to the California/Nevada State line in the middle of Lake Tahoe.
Lake Tahoe is the largest freshwater lake in the Sierra Nevada, more than 75% of the lake’s watershed exists within national forest lands comprising the Lake Tahoe Basin of the U.S. Forest Service. Lake Tahoe is a major tourist attraction in both Nevada and California. During late spring to early fall, the lake is popular for water sports and beach activities. Boating is a primary activity in Tahoe in the summer. Every August the lake is home to one of the most prestigious wooden boat shows in the country.
Most of the state is desert, yet Nevada also has more mountain ranges than any other state. Parts of the Sierra Nevada range even have snow half the year. In fact the name Nevada is derived for the Spanish word “nieve” meaning “snowcapped.” During the winter, thousands of people from all over Nevada and California flock to the Lake Tahoe area slopes for downhill skiing. The majority of the ski resorts in the Lake Tahoe region are on the northern end of the lake in the vicinity of Reno, Nevada. Another ski area can be found in a mountain pass north of Tahoe, Donner Pass.
What would come to be known as Donner Pass has been used by the California Trail, First Transcontinental Railroad, the Lincoln Highway, and Interstate 80. To reach California from the East, pioneer emigrants had to get their wagons over the Sierra Nevada mountain range. In 1844 the Stephens-Murphy Party (no relation to ‘Murph’) headed into the mountains they found a pass in the mountains and became the first overland emigrants to use what would become Donner Pass. Two years later, in early November 1846 the Donner Party found the route blocked by snow and was forced to spend the winter. Of the 81 party members, only 45 survived to reach California, many of them resorted to cannibalism in order to survive the long winter.
Resort areas like Lake Tahoe, Las Vegas and Reno, attract visitors from around the nation and world, but the number one attraction is not the ‘great outdoors’ as might be found at Tahoe.
Officially the City of Las Vegas, often called simply Vegas, is the most populous city in Nevada. Las Vegas was founded as a city in 1905, when 110 acres of land adjacent to the Union Pacific Railroad tracks were auctioned. In 1911, Las Vegas was incorporated as a city. The Pair-O-Dice Club was the first casino to open on Highway 91 on what is now the Las Vegas Strip. It opened in 1931, the same year that Nevada legalized gambling.
In late 1945, mobster Bugsy Siegel and his "partners" came to Las Vegas, after the fledgling resort city piqued Siegel's interest due to its legalized gambling and its off-track betting. Siegel began by purchasing the El Cortez on Fremont Street His expansion plans were hampered by unfriendly city officials aware of his criminal background, so he began looking for a site outside the city limits.
His vision became the Flamingo Hotel & Casino which opened on December 26, 1946, the 105-room hotel became the first luxury hotel on the Strip, being located 4 miles north of what was then downtown Las Vegas. By the way, if you purchased a drink at the bar of Bugsy’s Flamingo, you wouldn’t have paid any sales tax, there wasn’t any in Nevada at that time.
Of course, Las Vegas didn’t remain small very long, the ‘mob’ built one casino resort after another. But in 1968 Bugsy’s Flamingo was purchased by a business investment group as a result of the Nevada Gaming Commission’s ouster of ‘mafia types’. Just 5 years later the original MGM Grand Hotel and Casino opened in 1973 with 2,084 rooms, at the time it was one of the largest hotels in the world. In 1989, entrepreneur Steve Wynn changed the face of the Las Vegas gaming industry by opening up The Mirage, the Las Vegas Strip's first mega-casino resort. With the opening of Bellagio, Venetian, and Wynn resorts, the Vegas strip trended towards the luxurious high end visitor, as well as gambler. Today Las Vegas hosts more convention goers than any other location worldwide and they all pay sales tax.
There is another kind of gambling in Nevada as well, it's called 'Area 51 investigation. The United States Air Force facility commonly known as Area 51 is a remote detachment of Edwards Air Force Base, within the Nevada Test and Training Range.
Due to its secretive nature and connection to classified aircraft research, along with reports of unusual phenomena, Area 51 has become the focus of modern UFO’logy. Various researchers claim they have observed sophisticated flying technology that more closely resembles ‘flying saucers’ than any known aircraft. In addition several individuals have come forth saying they were employed at the base to do everything from ‘reverse engineer’ captured alien spacecraft, to attempt to clone recovered alien bodies. Yes, even UFO investigators pay sales tax at the near by "Little A'Le'Inn" in Rachel, NV. which sells maps and all kinds of 'alien goodies'.
About Sales Taxes and this series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We’re publishing "Sales Tax Tuesday" every week through 2015.
Sales tax provides critical revenue for states. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts1:
- The state sales tax rate is currently 6.85% but the total tax rate can be as high as 8.1% depending on local municipalities.
- The state’s chief tax collector is the Nevada Department of Revenue
- Nevada is a member of Streamlined Sales Tax (SST).
- Sales tax in Nevada is destination-based, meaning the rate is determined by the state rate of where the item is shipped to (the buyer’s location). This means sellers must know the exact current sales tax rate for every shipment they send to a purchaser.
- Nevada requires all businesses that sell, transfer, barter, license, lease, rent, use or otherwise consume taxable tangible personal property (TPP) in the state to register and collect and remit sales tax. Many providers of services related to the sale of TPP must also register and collect tax.
- Installation and repair services are sales tax-exempt if separately stated on invoices. The same with transportation, shipping and postage. Unprepared food, farm machinery and equipment, and newspapers are also exempt from sales tax.
- Online retailer Amazon, which has fulfillment centers in Nevada, began collecting sales tax in Nevada in January 2014. A bill requiring remote sellers to collect and remit Nevada sales and use tax when it is determined that the sellers has nexus was approved by the Nevada Senate in April 2015.
Did you know?
Greasing palms since 1999: Home to the Mr. Olympia bodybuilding competition for the last 16 years, Nevada allows bodybuilders to write-off the cost of body oil as an ordinary and necessary business expense. And if that wasn't odd enough, what about this...
What happens in Vegas, gets taxed in Vegas2:
A recent road trip landed me in Las Vegas, where I saw an amazing show. Le Rêve, at the Wynn, presents a magical world in which performers plunge into a deep pool and soar to the rafters, defying gravity with apparent ease. I was transported to a dreamlike state by the music, lights, dripping water and agile dancing acrobats.
Upon awakening, I found myself wondering about the tax implications of entertainment in Las Vegas, Nevada. After all, various forms of entertainment in the city draw visitors by the thousands, and those visitors surely contribute to Nevada’s tax revenue. I wanted to know more.
It turns out that Nevada imposes a live entertainment tax on “any activity provided for pleasure, enjoyment, recreation, relaxation, diversion or other similar purpose by a person or persons who are physically present when providing an activity to a patron or group of patrons who are physically present.”
According to the Nevada Department of Taxation, “Live Entertainment status commences when any patron is required to pay an admission charge before he is allowed to enter a facility, where there will be live entertainment, regardless of when the live entertainment starts. An admission charge includes an entertainment fee, a cover charge, a table reservation fee, or a required minimum purchase of food or merchandise.”
During my big night out, I paid the 10% live entertainment tax both on the cost of the ticket and on the snacks and drinks we purchased prior to the show. I also paid sales tax on the cost of the food and drinks; and in Nevada, 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.”
The Wynn Theatre will remit the live entertainment tax revenue to the Nevada Gaming Control Board. However, it will remit the sales tax to the Nevada Department of Taxation.
If you think that sounds wacky, you’re not alone. Several gentlemen’s clubs have taken the Nevada Department of Taxation to court, challenging the constitutionality of Nevada’s live entertainment tax. Last fall, the Nevada Supreme Court affirmed the district court summary judgment rejecting the facial challenge to its constitutionality, and this month, the United States Supreme Court denied the clubs’ petition for a writ of certiorari. For more information check out Gail Cole’s story at Avalara.
Manual sales and use tax, and ‘entertainment tax’ management is prone to error and consumes staff time in pass-through rather than revenue-generating activities. Just think of all the extra reporting having two different tax remittance agencies presents.
Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avalara allows businesses to be fully sales tax compliant without sacrificing productivity.
1 - State by State Sales Tax - Nevada, Pamela Guyton and Robin Conner, Avalara – May 22, 2015
2- What Happens in Vegas, Gets Taxed in Vegas, Gail Cole, Avalara, - February 25, 2015