Nevada has no state income tax: one of nine states where residents pay $0 in state income tax on wages, salaries, and investment income. Nevada funds state government primarily through sales tax, gaming taxes, and the Modified Business Tax on employer payrolls. The state sales tax rate is 6.85%, with county additions bringing combined rates to 8.375% in Clark County (Las Vegas) and 8.265% in Washoe County (Reno). Unprepared groceries are exempt from Nevada sales tax.
State Income Tax
None (0%)
State Sales Tax
6.85% state / 8.24% avg combined
Capital Gains
No state tax
Grocery Tax
Exempt (0%)
Nevada Has No State Income Tax
Nevada is one of nine states with no individual income tax. All wages, salaries, tips, overtime, bonuses, investment income, and retirement distributions are free from Nevada state income tax. Nevada's constitution and statutes do not permit a personal income tax, making this a durable structural feature rather than a policy that changes annually. Nevada funds state government through the 6.85% state sales tax, gaming taxes (approximately 6.75% on gaming revenue), and the Modified Business Tax on employer payrolls.
Nevada Sales Tax 2026
Nevada's state sales tax rate is 6.85%. County-level additions vary significantly: Clark County (Las Vegas) adds 1.525% for a combined rate of 8.375%; Washoe County (Reno) adds 1.415% for a combined rate of 8.265%. The statewide average combined rate is approximately 8.24%. Unprepared groceries are exempt from Nevada sales tax.
Nevada Modified Business Tax (MBT)
The Modified Business Tax is Nevada's employer-side payroll tax on wages exceeding $50,000 per quarter. The general business rate is 1.17% (effective July 1, 2023). Financial institutions are taxed at 1.554%. The MBT is paid entirely by employers and does not appear on employee pay stubs, but it is part of the total cost of employment in Nevada. The threshold and rate apply on a quarterly basis per employer.
OBBBA Tips and Overtime in Nevada
The One Big Beautiful Bill Act (OBBBA) introduced federal deductions for tips, overtime, and senior income. Since Nevada has no state income tax, these deductions affect only federal tax: there is no Nevada state tax to reduce. Nevada's large hospitality and casino workforce (where tip income is significant) benefits from the federal OBBBA tip deduction, saving on federal taxes.
Nevada Retirement Tax (Fully Exempt)
Nevada has no state income tax, so all retirement income is entirely free from state taxation. Social Security benefits, pensions, 401(k) and 403(b) distributions, IRA withdrawals, and annuities are all exempt from Nevada state tax. Nevada consistently ranks among the most tax-friendly states for retirees.
No. Nevada has no state individual income tax. Nevada is one of nine states with no income tax on wages, salaries, or investment income. Nevada funds state government primarily through sales tax, gaming taxes, and the Modified Business Tax (MBT) on employer payrolls. Residents pay $0 in Nevada state income tax on any type of income.
What is Nevada's sales tax rate?
Nevada's state sales tax rate is 6.85%. County-level additions vary: Clark County (Las Vegas) has a combined rate of 8.375%, and Washoe County (Reno) has a combined rate of 8.265%. The statewide average combined rate is approximately 8.24%.
Does Nevada tax groceries?
No. Nevada exempts food for home consumption (unprepared groceries) from sales and use tax. Prepared food intended for immediate consumption is taxable at the full rate. Dietary supplements, candy, and soft drinks are also taxable. The exemption is governed by Nevada Regulation R056-18A.
Does the OBBBA tips and overtime deduction apply in Nevada?
The OBBBA federal deductions for tips, overtime, and senior income reduce your federal taxable income. Since Nevada has no state income tax, there is no state-level conformity question. You already pay $0 state tax on all earned income. Nevada workers with tip income (particularly common in the Las Vegas casino and hospitality industry) benefit from the federal deduction but have no state tax to reduce.
What is Nevada's Modified Business Tax (MBT)?
The Modified Business Tax (MBT) is Nevada's employer-side payroll tax on wages above $50,000 per quarter. The general business rate is 1.17% (effective July 1, 2023, reduced from 1.378% which applied July 1, 2019–June 30, 2023). Financial institutions are taxed at 1.554%. The MBT does not appear on employee pay stubs but increases the cost of employment in Nevada. It is paid entirely by the employer, not the employee.
Does Nevada tax retirement income?
No. Nevada has no state income tax. All retirement income: Social Security benefits, pensions, 401(k) distributions, and IRA withdrawals: is entirely exempt from Nevada state taxation. This makes Nevada highly attractive for retirees alongside its lack of any state income tax.
Does Nevada tax capital gains?
No. Nevada has no state income tax. Capital gains: whether short-term or long-term: are not subject to any Nevada state tax. Only federal capital gains tax applies to Nevada residents.
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