This post is for online sellers with ties (either actual or potential) to the State of Nevada for sales tax purposes. Hopefully this will give you a better idea of when you’re required to collect sales tax in Nevada and how much to collect. I’ve based the following cases on the most common scenarios we see with our TaxJar customers. As always, if you and your business don’t fit into any of the following scenarios, your best option is to contact a tax professional and get some guidance.
Online Sellers Without Any Ties to Nevada
If you’re an online seller living in a state other than Nevada and your business has no presence in the state (no inventory, no salespeople) then you can stop reading this post. Cheers!
Online Sellers Living in Nevada
If you’re an online seller living in Nevada then it’s probably safe to assume that your business is also based there as well. If that’s true then your business has sales tax nexus to the state. This means you are required to register your business with the Nevada Department of Taxation. The cost if $15 per business location, and the state may also require a security deposit. Nevada provides a handy walk-thru to help you register for your Nevada sales tax permit.
Since you live and operate your business in Nevada, this also means you need to begin collecting sales tax on orders shipped to addresses in Nevada. I’ll go through how to determine how much sales tax you’re required to collect a bit later in the post.
Out-of-States Online Sellers Using a Fulfillment Service
Let’s say you live in North Carolina (or any state other than Nevada) and you use a fulfillment service that warehouses and ships your inventory from a location in Nevada. According to Nevada state law, you have sales tax nexus in Nevada and must collect sales tax from buyers in Nevada.
We spoke on the phone to the Nevada Department of Taxation to ask about this and they referred us to NRS 372.724.
(Click to enlarge or visit the website to read the full statute)
When asked the meaning of “satisfy the requirements under the United States Constitution” they directed us to the Quill Corp. v. North Dakota case and said that a presence, such as inventory in a warehouse, does constitute sale tax nexus.
Collecting Nevada Sales Tax
If you live or have a physical presence in Nevada, then you are required to collect sales tax on sales into Nevada. How much you should collect is the next piece you need to figure out. The key thing to understand is that Nevada is a destination-based sales tax state – in other words, the sales tax rate you collect is based on the location of your customer. It is not based on your businesses location.
The state’s Department of Taxation has provided a handy map of local sales tax rates throughout the state of Nevada.
Here are a couple of examples on how you would collect sales tax as a Nevada seller:
If you live in Nevada:
Let’s say you live in Orovada in Humboldt County, and a customer who lives in Reno, in Washoe County, makes a purchase from you. You would charge sales tax based on the location where your buyer lives. In this case, you would charge 7.725%, the Washoe County tax rate.
If you don’t live in Nevada, but have “nexus” in Nevada:
If you live in say, Charlotte, North Carolina, but use FBA and have items warehoused in an Amazon Fulfillment Center in Nevada, then you must still charge sales tax. Just like with the above example, you would charge sales tax based on the rate where your buyer lives. If your buyer lives in Eureka County, then you would charge 6.850% sales tax.
Filing Sales Tax in Nevada
If you need to file a sales tax return in Nevada, TaxJar has your back. You can now enroll in AutoFile for the state of Nevada and we’ll automatically file your sales tax return for you! Find out more at TaxJar.com.
Summary: If Your Business Has Nexus in Nevada, Collect Sales Tax on the Shipping Address
The two most common ways to establish nexus in Nevada is by living and operating your business there or by sending your inventory there through a service like FBA. If you have nexus, register your business with the state and collect sales tax based on the address where the item is being delivered.
Got questions? Feedback? Tell me about your experience selling in Nevada in the discussion section below.
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