Understanding the Nevada franchise tax

Nevada doesn't impose a franchise tax on businesses, setting it apart from states like Delaware and New York. This absence offers real advantages for companies considering where to establish operations or expand their business presence.

However, Nevada businesses still face compliance obligations, such as Annual List filings with the Nevada Secretary of State, and taxes, such as the Commerce Tax, Modified Business Tax, and Sales and Use Tax.

Key obligations for Nevada businesses

A major selling point: Nevada has no personal or corporate income taxes. This, along with no franchise tax, attracts tax-conscious businesses. Here’s a quick overview of what you need to know.

Annual report filings

Every Nevada-registered business must file an Annual List (also called the Nevada annual report) to maintain good standing, regardless of other tax obligations.

Both LLCs and corporations must file with the Secretary of State by the last day of the anniversary month in which the entity was originally formed or registered.

Late filings incur penalties, and continued non-compliance can result in administrative dissolution.

State business license

In addition to the Annual List, most Nevada entities must obtain and renew a state business license annually. While Nevada has no franchise tax on income, this license fee functions as a recurring cost for maintaining your business registration.

Other Nevada taxes

While Nevada offers a business-friendly tax environment without a franchise tax, companies operating may owe one or more of the following taxes:

• Commerce Tax: Applies only if your Nevada gross revenue exceeds $4 million in a fiscal year (July 1–June 30), with rates varying by business category.
• Modified Business Tax (MBT): A payroll tax on businesses with Nevada employees, currently around 1.17% of taxable wages for most employers (higher for financial institutions).
• Sales and Use Tax: Nevada taxes sales of tangible goods and certain services, with a statewide base rate of 6.85% plus local additions. 

You can file and pay these taxes through the Nevada Department of Taxation.

Discern helps you track Nevada compliance

Nevada's compliance requirements create ongoing deadlines that multiply when managing entities across multiple states.

While Discern does not file Nevada taxes directly (these are handled through the Department of Taxation), Discern can file your Nevada Annual List, track your business license renewals, notify you when obligations are due, and provide centralized compliance management across all your entities.

Ready to simplify your multi-state compliance? Book a demo to see how Discern streamlines entity management across all 50 states and DC.