SALES TAX TUESDAY 2018: Nevada

by

The capital of Nevada is Carson City, named for the river flowing through it which was named for mountain man Kit Carson.

Nevada is officially known as the ‘Silver State’ because of its long history of silver production that began in the 1850’s with discovery of the ‘Comstock lode’, which was one of the most significant events in the history of silver exploration in the western United States.

Virginia City, Nevada was born almost over night upon news of the discovery of the Comstock silver. It became one of the most prominent mining centers within the state until the boom and bust of Goldfield, a city which was born out of and died with the last of America’s great gold rushes.

You see, not only has Nevada been a ‘silver rich’ production state, but a ‘gold rich’ production state as well. As late as 2015, Nevada was the second largest producer of silver at 10.93-million troy-ounces, and more than 6.74-million troy-ounces of Gold, anywhere. In fact, on a historical basis, only South Africa has produced more gold than Nevada anywhere else in the world. 

Truth be told, the U.S. Mint located in Carson City, Nevada has cast more gold and silver coins during our nation’s history than anywhere else on earth. It still today (as seen above) looks almost identical to the way it looked back in 1863.

Speaking of 'making a mint', 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.

That's why Insightful Accountant has partnered with Avalara, the 'tax people', to produce this this series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We’re publishing "Sales Tax Tuesday" 2018 every week for all of 2018 and during the early part of 2019 to present not only our state-by-state review, but what's new and different with sales, use and special taxes to help insure that you are aware of the key tax facts impacting you and your clients.

Besides these precious metal facts associated with Nevada and Carson City, there are a couple of other unique things about the ‘Consolidated Municipality of Carson City.’ Prior to 1969, Carson City was also the county seat of Ormsby County, but the City and County were merged together. The city limits today extend across the Sierra Nevada to the California/Nevada State line in the middle of Lake Tahoe.

Lake Tahoe just happens to be the largest freshwater lake in the Sierra Nevada. More than seventy-five percent 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 year round 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, 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, and found a pass through them 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 stay through the winter. Of the 81 party members, only 45 survived to reach California, many of them resorted to cannibalism 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. Nevada’s number one attraction is Las Vegas, known to many as simply ‘Vegas.’

Today, nearly three-quarters of all residents of Nevada live in Clark County which contains the Las Vegas-Paradise metropolitan area that also serves as home to the state’s three largest incorporated cities including Las Vegas.

Vegas was founded in 1905 when 110 acres of land adjacent to the Union Pacific Railroad were auctioned. Just six years later the area was incorporated as the ‘City of Las Vegas.’

The very first Vegas casino was the Pair-o-dice Club opened in 1931 on Highway 91, which is today known as the ‘Las Vegas Strip,’ after the State of Nevada legalized gambling.

She may not be the grandest hotel in Las Vegas anymore, but she certainly was the first.

Late in 1945, mobster Ben ‘Bugsy’ Siegel came to Las Vegas due to its legalized gambling and off-track betting. Siegel and his partners back east, including Meyer Lansky and Charlie "Lucky" Luciano, began by purchasing the El Cortez on Fremont Street. But Siegel’s expansion plans were hampered by unfriendly city officials aware of his criminal background. Soon thereafter, he began looking for a site outside the city limits for what he envisioned as the first luxury hotel and casino in Vegas.

The Flamingo Hotel & Casino opened on Christmas Day 1946 on a site 4 miles north of what was then downtown Las Vegas. The 105-room hotel and gambling parlor cost a phenomenal $6-million which was 6 times more than originally projected and approved by 'the mob.' Despite the gala event featuring Clark Gable, Lana Turner, Judy Garland and countless other ‘Hollywood Stars,’ the resort had to close early in January of 1947 for repairs and alterations.

Two months later the Flamingo re-opened and within a month was actually turning a substantial profit; however, it had become evident to ‘the mob’ that Siegel, or his girlfriend Virginia Hill (for whom the hotel was supposedly named) had skimmed more than $2.5-million of constructions funds held in a Swiss Bank account. On the night of June 20, 1947, Ben Siegel was shot to death while visiting his home in Beverly Hills. 

Moe Sedway and Gus Greenbaum, mobster associates of Meyer Lansky, seized control of the Flamingo the morning after Siegel’s death. Within 18-months, the hotel and casino had earned more than $4-million in profits, a testament to the fact that Siegel’s vision for Vegas paid off.

In 1960, the hotel was sold to an investor’s group for an undisclosed sum of money (which was later estimated at in excess of $100-million). In 1972, it was sold again to the Hilton Corporation. The hotel was once again sold in 2005 to Harrah’s Entertainment as part of a bigger acquisition of multiple properties, Harrah’s changed their name to Caesar’s Entertainment in 2010 who owns the property today. The facility has been renovated no less than 12-times since first opening and today has more than 4,000 rooms and 73,000 square feet of gaming space.

Except for a small plaque near the outdoor wedding chapel at the Flamingo, there is no single recognition of Bugsy Siegel as ‘the man who envisioned Las Vegas’ almost as grandiose as it is today

By the way, if you purchased a drink at the bar of Bugsy’s Flamingo, you wouldn’t have paid any sales tax, because there wasn’t any sales tax in Nevada way back then. Maybe that’s another reason he thought it was a great place for a gambling and entertainment mecca. Today however, the Nevada state sales tax rate is currently 4.6%. Depending on local municipalities, the total tax rate can be as high as 8.265%.

Nevada Sales Tax Facts:

  • State sales tax rates is 4.6%, can be as high as 8.265% when combined with other local rates.
  • Other, local-level tax rates in the state of Nevada are quite complex compared against local-level tax rates in other states. Nevada sales tax may also be levied at the city/county/school/transportation and SPD (special purpose district) levels.
  • Nevada sales tax has numerous local taxing levels that must be monitored and maintained on a regular basis, it is complex and time-consuming due to the volume of jurisdictions.
  • 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. 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.
  • As a Streamlined Sales Tax state, Nevada encourages out-of-state businesses without a sales tax obligation to register with the state and collect.
  • 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.
  • 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".
  • Amazon.com owns and operates a number of fulfillment centers in Nevada. This physical presence, or nexus, creates a sales tax obligation for Amazon and many sellers participating in Amazon’s Seller Central and Fulfillment By Amazon (FBA) programs.
  • The state’s chief tax collector is the Nevada Department of Revenue, Division of Taxation, but some taxes, such as those directly associated with the 'gaming industry' and the live entertainment tax are under the jurisdiction of the Nevada Gaming Control Board.

If all of this sounds cumbersome and complex it is, 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 posed by having two different tax remittance agencies. Paperwork, paperwork and more paperwork.

That's why you need Avalara solutions for sales tax automation, like AvaTax which includes 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.  Your sales tax is always right, streamlined and seamless.