With no corporate income tax, personal income tax, or franchise tax, Nevada is a popular state for business owners. In fact, the Tax Foundation ranked Nevada as number seven in the 2024 State Business Tax Climate Index.
Along with its favorable tax policies, the Silver State also offers a handful of business tax incentives in the form of tax abatements.
If you own a business in Nevada or want to start one, here’s what you need to know about the state’s tax incentive programs.
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Business tax abatements in Nevada
Nevada businesses can get a tax abatement—or reduction in their total taxes—for a specific period of time if they meet certain economic development requirements. Here are Nevada’s tax abatement programs for businesses:
Standard Tax Abatements
Nevada’s standard business tax abatements include:
- Sales and Use Tax Abatement: Gives businesses a reduced tax rate—as low as 2%—on the sales and use tax from qualified capital equipment purchases. Think: manufacturing machinery, industrial robots, or large computers.
- Modified Business Tax Abatement: Gives businesses a 50% abatement on the 1.17% rate on quarterly wages exceeding $50,000.
- Personal Property Tax Abatement: Gives businesses an abatement on personal property tax, not to exceed 50% over a maximum of 10 years.
- Real Property Tax Abatement for Recycling: Gives qualified recycling businesses an abatement of up to 50% for 10 years on real and personal property taxes.
Your business can qualify for a standard tax abatement by meeting two of the below three criteria:
- Pay employees at or above the Nevada state average wage
- Make a significant capital investment in an economic growth project
- Create a certain number of new jobs, provide a medical insurance plan to employees, and pay at least 65% of the plan’s premium costs
Your company also needs to maintain your business in Nevada for five years and generate more than 50% of revenue from your economic growth project from outside of the state. Whether you receive a full or partial tax abatement depends on the wages you pay your employees.
If you pay 100% or more of Nevada’s statewide average wage, you can get a 100% tax abatement; if you pay 85-99% of the statewide average wage, you’ll qualify for a partial tax abatement, the exact percentage of which depends on the tax abatement in question.
How many jobs you need to create and how much capital you need to invest depends on the Nevada county where you relocate or expand your operations:
- Businesses relocating to urban counties must invest at least $1 million in a growth project ($5 million for manufacturing companies) and create at least 50 full-time equivalent jobs
- Businesses relocating to rural counties must invest at least $250,000 in a growth project ($1 million for manufacturing companies) and create at least 10 full-time equivalent jobs
- Businesses expanding within Nevada need to make a capital investment of at least 20% of the value of their company’s tangible personal property and increase their employee headcount by either 10% or more than their existing headcount by 25 (for urban areas) or six (for rural areas), whichever number is greater
Related: 7 tips for hiring new employees in Nevada
Data Center Tax Abatement
Nevada also offers tax abatements to data center companies that locate in Nevada or expand their business within the state. Eligible data center companies can qualify for the following:
- A personal property tax abatement of 75% of the tax due for 10 or 20 years
- A sales and use tax abatement that reduces the rate to 4.6% or 2% for 10 or 20 years
To qualify for the abatement, your company must meet the below criteria within five years:
- For 10-year abatements: Hire 10 full-time employees who are Nevada residents, pay at least 100% of the statewide average wage, and invest at least $25 million in cumulative capital expenditures between the applicant and tenants
- For 20-year abatements: Hire 50 full-time employees who are Nevada residents, pay at least 100% of the statewide average wage, and invest at least $100 million in cumulative capital expenditures between the applicant and tenants
You also have to register your company in Nevada and remain there for 10 years, offer your employees a medical insurance plan where you pay at least 65% of the premiums, and ensure that at least half of all your workers hired to construct the data center are Nevada residents.
Aviation Parts Tax Abatement
Nevada’s Aviation Parts Tax Abatement serves companies involved in the operation, maintenance, servicing, testing, repairing, overhauling, or assembling of an aircraft or aircraft components—that locate to or expand their business within Nevada.
The tax abatement provides:
- A personal property tax abatement of 50% of the tax due for 10 years
- A sales and use tax abatement, which reduces the rate to either 4.6% or 2% for 10 years
To qualify, new aviation companies must:
- Create five or more new full-time jobs within one year
- Meet one of the criteria below:
- Make a new capital investment of at least $250,000 within one year
- Maintain at least $5 million worth of tangible personal property in Nevada
- Pay an average wage of at least 100% of the statewide average wage
- Develop, refine, or own a patent or other intellectual property
- Have received an FAA certificate
Existing companies, on the other hand, must:
- Increase the number of full-time employees by 3% or three (whichever is greater) within one year
- Meet one of the criteria below:
- Make a new capital investment of at least $250,000 within one year
- Maintain at least $5 million worth of tangible personal property in Nevada
- Pay an average wage of at least 100% of the statewide average wage
- Develop, refine, or own a patent or other intellectual property
- Have received an FAA certificate
All aviation companies applying for the tax abatement also have to register within Nevada, maintain their business in Nevada for five, and offer employees a health insurance plan where the company pays at least 65% of the plan’s premium costs.
To learn more about the application process for any of Nevada’s business tax abatements, review this guide from the Governor’s Office of Economic Development (GOED).
Nevada Film Office Tax Credit Program
The Nevada Film Office (NFO) has a tax credit program available to businesses in the production industry. Companies that set their production projects in Nevada can receive:
- A 15% tax credit on qualified production costs
- A 15% tax credit on wages, salaries, and fringes for all resident personnel on the project
- A 12% tax credit on wages, salaries, and fringes for all non-resident personnel
There are also two bonus tax credits:
- Bonus 1 is a tax credit equal to 5% of the cumulative qualified production costs if over 50% of the below-the-line crew are Nevada residents
- Bonus 1 is a tax credit equal to 5% of the cumulative qualified production costs if more than 50% of the filming days took place in a Nevada county that hosted qualified productions that incurred less than $10 million in expenditures in each of the previous two years
To qualify for the film incentive, you need to:
- Have more than $500,000 in qualified production costs in Nevada
- Use at least 60% of the prediction budget on qualified direct production expenditures in Nevada
Learn more about how to apply for the NFO incentive here.
Nevada city and county tax credits
Business tax incentives aren’t just at the state level—some cities and counties in Nevada have local business tax credits or abatement programs. Check your city’s website or consult the economic development department for more information.
Financing for Nevada small businesses
No matter what stage your business is in, financing can help. Whether you need a grant to invest in a growth project or a microloan to cover operational expenses, Nevada has you covered. Explore the Silver State’s business financing resources on Gusto’s guide to grants and loans in Nevada.