Nevada is a tax-friendly state, but even in this tax-advantaged environment, it’s still wise to have a knowledgeable tax professional review your business’s books on a regular basis. NCH provides comprehensive tax services to minimize the burden that Nevada’s modified business tax (MBT) places on businesses of all sizes. The MBT is based on the total gross wages and reported tips paid by an employer in each calendar quarter as reported to ESD on Form NUCS 4072 less employee healthcare deductions. The MBT is imposed on all employers with taxable wages in Nevada except for non-profit organizations, Indian tribes, political subdivisions, and certain household employees.
If a business pays Commerce Tax but owes MBT, it may claim up to 50% of the Commerce Tax paid as an MBT credit in any four quarters immediately following the end of its Commerce Tax year. The credit is limited to the amount of MBT owed and excludes penalty and interest. For example, Parent Inc. owns 100% of PP LLC, which owns 80% of Store Front LLP and 75% of Factory Inc. PP LLC pays Commerce Tax and owes MBT.
Unemployment Insurance and MBT Registration
As a business owner, keeping up with all tax filing requirements is important. Failure to do so could result in penalties or interest payments. Keeping accurate records is essential in order to comply with Nevada’s Modified Business Tax rules. It’s also a good idea to have a tax professional review all of your filings to ensure they’re filed correctly.
If your company has registered with the Department of Employment Training & Rehabilitation (DETR) for Unemployment Insurance, it is automatically registered for Modified Business Tax. The Department will also provide the business with an MBT account number.
All businesses that register for MBT must also file an annual list of officers and directors. There is an annual fee of $100 for most businesses and $125 for LLCs and corporations. Businesses must renew their MBT accounts by the business anniversary date. There are many other filing nuances that small companies should understand in order to maintain tax compliance. NCH’s experienced team can help. Contact us today to learn more.
Nevada Modified Business Tax Exemption Amount
Exemption Amount: Nevada offers an exemption for the first $50,000 of taxable wages paid by a business in a calendar quarter after deducting employee health benefits (https://tax.nv.gov/Forms/Modified_Business_Tax_Forms/).
Who Qualifies: This exemption applies to most general businesses. However, there are separate rules for financial institutions and mining companies which don’t have this exemption (https://tax.nv.gov/Forms/Modified_Business_Tax_Forms/).
Let’s say a general business pays out $72,000 in wages (after health benefit deductions) in a quarter.
- The first $50,000 is exempt from the MBT.
- The MBT would only apply to the remaining $22,000 ($72,000 – $50,000).