Nevada has no state income tax on individuals. The Nevada Constitution, at Article 10, Section 1(9), prohibits any tax on the wages or personal income of natural persons, and that ban covers salaries, hourly pay, tips, interest, dividends, and every other form of individual earnings. If you live and work in Nevada, your paycheck is not reduced by any state income tax withholding, and you do not file a Nevada return based on earned income. You still owe federal income tax, and you still pay Nevada’s sales and property taxes, but the state itself takes nothing from your wages.1State of Nevada Department of Taxation. Income Tax in Nevada
Why the Ban Is Permanent
Because the prohibition sits in the state constitution rather than in ordinary legislation, repealing it would require a constitutional amendment. That process needs approval by two consecutive sessions of the state legislature followed by a majority vote of the public. For practical purposes, the ban is permanent.
The same provision does allow the state to tax business income and revenue, which is why Nevada employers and large companies face their own obligations (covered further down). But those taxes do not reach your personal paycheck.
Federal Income Tax Still Applies
Living in a no-income-tax state does not change what you owe the IRS. Most U.S. citizens and permanent residents who earn income must file an annual federal return regardless of where they live.2Internal Revenue Service. Check if You Need to File a Tax Return For 2026, federal rates run from 10 percent to 37 percent across seven brackets, with the top rate kicking in on taxable income above $640,600 for single filers.
Federal payroll taxes apply in full as well. Your employer withholds Social Security tax at 6.2 percent on wages up to the annual wage base and Medicare tax at 1.45 percent on all wages. An additional 0.9 percent Medicare surtax applies to earnings above $200,000 for single filers. Self-employed Nevadans pay both the employer and employee halves through self-employment tax.
Nevada Sales Tax
Without personal income tax revenue, the state leans on sales and use taxes. The base state sales tax rate is 6.85 percent, and counties add their own supplemental rates for transportation, water infrastructure, public safety, and other local needs. What you actually pay at the register depends on where the transaction happens, ranging from 6.85 percent in counties with no local add-ons up to 8.375 percent in Clark County, which includes Las Vegas.3State of Nevada Department of Taxation. Sales Tax and Use Tax
Groceries purchased for home consumption and prescription medications are generally exempt. Prepared food meant for immediate consumption, such as restaurant meals or ready-to-eat deli items, does not qualify for the grocery exemption and is taxed at the standard rate.3State of Nevada Department of Taxation. Sales Tax and Use Tax
If you buy taxable goods from an out-of-state seller who does not collect Nevada sales tax, you technically owe use tax at the same combined rate that would have applied locally. The use tax exists to keep residents from avoiding sales tax by shopping across state lines.
Property Taxes
Local services, including school districts, fire departments, and law enforcement, are funded largely through property taxes on land, buildings, and some business equipment. Under NRS 361.225, all taxable property is assessed at 35 percent of its taxable value as set by the county assessor.4Nevada Legislature. Nevada Revised Statutes Chapter 361 – Property Tax
Nevada homeowners benefit from a statutory “tax cap” that limits how fast property tax bills can rise. For owner-occupied primary residences, the annual increase is capped at 3 percent regardless of how quickly real estate values climb. For other property, including rentals, commercial buildings, and vacant land, the cap is the greater of twice the Consumer Price Index or the area’s average growth rate, up to a maximum of 8 percent per year.5State of Nevada Department of Taxation. NRS 361.4722 Tax Cap Factors FY 2025-2026
Qualifying veterans, disabled veterans, and certain surviving spouses can claim property tax exemptions that reduce assessed value, with the amounts adjusted annually for inflation.6State of Nevada Department of Taxation. Veterans Tax Exemptions FAQs
Estate and Inheritance Taxes
Nevada imposes no estate tax and no inheritance tax. A state estate tax provision exists in NRS 375A but was tied to a federal credit for state death taxes that Congress eliminated effective January 1, 2005. Since then, Nevada has not required estate tax filings.7State of Nevada Department of Taxation. Estate Tax FAQs Federal estate tax still applies to estates above the federal exemption, no matter where the decedent lived.
Taxes on Nevada Businesses
Although individuals owe no state income tax, employers and larger companies do face state-level obligations. If you run a business or employ workers in Nevada, two taxes matter most.
The Modified Business Tax (MBT) is a payroll-based excise tax calculated on gross wages paid each calendar quarter. For general businesses, the rate is 1.475 percent on quarterly wages above $50,000, with no tax owed on wages at or below that threshold (though a return is still required). Financial institutions and mining operations are taxed separately at 2 percent on all wages, with no $50,000 exemption. Employers may deduct amounts paid for employee health insurance premiums before calculating the tax, and the law prohibits passing any portion of the MBT through to employees’ paychecks.8Nevada Legislature. Nevada Revised Statutes 363B.110 – Imposition, Amount and Payment of Tax; Filing of Return; Credits9Nevada Legislature. Nevada Revised Statutes 363B.115 – Deduction of Certain Amounts Paid for Health Insurance or Health Benefit Plan for Employees
The Commerce Tax applies to businesses with Nevada gross revenue above $4 million in a fiscal year running July 1 through June 30. Tax is calculated only on revenue above the $4 million threshold, and rates vary by industry category, running from 0.051 percent to 0.331 percent.10State of Nevada Department of Taxation. Commerce Tax11Nevada Legislature. Nevada Revised Statutes Chapter 363C – Commerce Tax
Moving to Nevada for the Tax Benefit
If part of your reason for moving is the lack of state income tax, you need to actually establish residency, not just buy property here. Nevada requires physical presence during the period you claim residency along with the intent to make Nevada your permanent home.12State of Nevada Department of Taxation. Nevada Legal Residency Practical steps that document that intent:
- Get a Nevada driver’s license or state ID within 30 days of moving.
- Register your vehicle in Nevada within 45 days of becoming a resident.
- Register to vote once you have lived in the state for at least 30 days and in your voting precinct for at least 10 days.
- Update your mailing address, bank accounts, and other official records to your Nevada address.
Temporary absences for travel, work assignments, or family obligations do not break residency as long as you intend to return.12State of Nevada Department of Taxation. Nevada Legal Residency
The Remote Work Trap
Moving to Nevada does not automatically free you from another state’s income tax if you keep working remotely for an employer based somewhere that taxes income. Most states tax income based on where the work is physically performed, meaning wages you earn while sitting in Nevada generally cannot be taxed by another state. A handful of states, including New York and Pennsylvania, apply a “convenience of the employer” rule. Under that rule, if you work remotely for your own convenience rather than because the employer requires it, the employer’s state may still claim the right to tax your wages.
Check your W-2 carefully if your employer’s state is still withholding income tax after your move. You may be entitled to a refund by filing a nonresident return in that state. A tax professional familiar with multistate issues is worth consulting during your first year as a Nevada resident.