Franchise Tax (Commerce Tax) in Nevada: Complete Guide 2026
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Franchise Tax (Commerce Tax) in Nevada: Complete Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Nevada is well known for having no corporate income tax and no individual income tax. However, businesses operating in the state are subject to two primary business-level taxes: the Commerce Tax and the Modified Business Tax (MBT). The Commerce Tax, enacted in 2015, functions as Nevada’s closest equivalent to a franchise or gross receipts tax. It applies to businesses with Nevada gross revenue exceeding ~$4,000,000, with rates that vary by industry. The MBT is a payroll-based tax on most employers. Together, these taxes represent Nevada’s approach to generating business revenue without a traditional income tax.
Nevada Commerce Tax Rates (2026)
The Commerce Tax rate depends on the business’s NAICS industry classification:
| Industry Category | Rate (per $1 of Nevada gross revenue over ~$4M) |
|---|---|
| Mining | ~0.051% |
| Rail transportation | ~0.054% |
| Utilities | ~0.136% |
| Manufacturing | ~0.091% |
| Wholesale trade | ~0.101% |
| Retail trade | ~0.111% |
| Information services | ~0.064% |
| Real estate | ~0.111% |
| Professional/scientific/technical | ~0.181% |
| Health care and social assistance | ~0.190% |
| Accommodation and food services | ~0.200% |
| Finance and insurance | ~0.171% |
| Construction | ~0.083% |
| All other categories | ~0.128% |
Modified Business Tax (MBT)
| Category | Rate | Wage Threshold |
|---|---|---|
| General businesses | ~1.378% | Quarterly wages over ~$50,000 |
| Financial institutions | ~2.00% | All wages |
| Mining | ~1.378% | Quarterly wages over ~$50,000 |
How Nevada’s Commerce Tax Works
Revenue Threshold
The Commerce Tax applies only to businesses with Nevada gross revenue exceeding ~$4,000,000 in a fiscal year (July 1 — June 30). Businesses below this threshold must still file an annual return but owe no Commerce Tax. The ~$4,000,000 threshold applies to the business entity, not individual locations.
Calculating Gross Revenue
Nevada gross revenue includes all revenue from operations in Nevada, with limited exclusions:
- Revenue from sales to customers outside Nevada
- Certain intercompany transactions within a controlled group
- Specific statutory exclusions (insurance premiums, certain financial transactions)
The tax applies to gross revenue, not net income, which means it can be owed even when a business is unprofitable.
Industry Classification
Businesses are classified into one of ~26 industry categories based on their primary NAICS code. The rate applicable to your primary business activity determines the Commerce Tax rate. If a business has revenue from multiple activities, the rate is based on the predominant source of revenue.
Commerce Tax Credit Against MBT
Businesses that pay the Commerce Tax can claim a dollar-for-dollar credit against their Modified Business Tax liability. This prevents double taxation and means many businesses effectively pay either the Commerce Tax or the MBT, but not the full amount of both.
Modified Business Tax (MBT)
The MBT is a payroll-based tax that applies to most Nevada employers:
- General businesses: Pay ~1.378% on quarterly gross wages exceeding ~$50,000
- Financial institutions: Pay ~2.00% on all gross wages (no threshold)
- Mining companies: Pay ~1.378% on quarterly wages exceeding ~$50,000
The MBT is filed and paid quarterly. Health care benefits paid by the employer can be deducted from gross wages before calculating the tax.
Annual Business License Fee
In addition to the Commerce Tax and MBT, most Nevada businesses must obtain a state business license and pay an annual fee:
| Entity Type | Annual Fee |
|---|---|
| Corporations | ~$500 |
| LLCs | ~$200 |
| LPs, LLPs | ~$200 |
| Sole proprietors | ~$200 |
Filing Requirements
| Tax | Filing Frequency | Due Date |
|---|---|---|
| Commerce Tax | Annual | August 14 (for fiscal year ending June 30) |
| MBT (general) | Quarterly | Last day of the month following the quarter |
| Business license renewal | Annual | Anniversary of formation/registration |
All filings can be completed online through the Nevada Department of Taxation’s portal.
Comparison to Other States
| State | Business Tax Type | Rate | Base |
|---|---|---|---|
| Nevada | Commerce Tax | ~0.051% — ~0.331% | Gross revenue over ~$4M |
| Texas | Franchise Tax | ~0.375% — ~0.75% | Revenue margin |
| Washington | B&O Tax | ~0.138% — ~3.30% | Gross revenue |
| Ohio | Commercial Activity Tax | ~0.26% | Gross receipts over ~$1M |
| Wyoming | No business tax | 0% | N/A |
Nevada’s Commerce Tax rates are among the lowest gross-revenue-based taxes in the country, and the ~$4,000,000 threshold exempts most small businesses entirely.
Tips for Minimizing Nevada Business Taxes
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Verify your NAICS code. Your industry classification determines your Commerce Tax rate. Ensure you are classified under the code that accurately reflects your primary business activity and results in the correct rate.
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Track the ~$4,000,000 threshold. If your Nevada gross revenue is near the threshold, review whether revenue recognition timing can keep you below it.
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Claim the Commerce Tax credit. If you pay both Commerce Tax and MBT, apply the Commerce Tax as a credit against MBT to avoid overpaying.
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Deduct health care benefits from MBT. Employer-paid health care costs reduce the wage base for MBT calculations.
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Monitor the ~$50,000 quarterly wage threshold. Employers with quarterly wages under ~$50,000 owe no general MBT.
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File on time. Late Commerce Tax filings incur penalties and interest. Mark the August 14 deadline.
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Evaluate entity structure. Different entity types have different annual license fees. LLCs pay ~$200 versus ~$500 for corporations.
Key Takeaways
- Nevada has no corporate or individual income tax, but businesses may owe the Commerce Tax and Modified Business Tax.
- The Commerce Tax applies to businesses with Nevada gross revenue over ~$4,000,000, at industry-specific rates ranging from ~0.051% to ~0.331%.
- The MBT is a payroll-based tax of ~1.378% on quarterly wages over ~$50,000.
- Commerce Tax paid can be credited against MBT liability.
- Annual business license fees range from ~$200 (LLCs) to ~$500 (corporations).
- The ~$4,000,000 Commerce Tax threshold exempts most small businesses.
Next Steps
- Federal Income Tax Guide 2026 — Federal business tax obligations that apply in Nevada.
- Self-Employment Tax Guide — Federal self-employment taxes still apply in Nevada.
- State Income Tax Rates Comparison 2026 — Compare Nevada’s no-income-tax advantage.
- Tax Bracket Calculator — Estimate your federal-only tax liability.
- Find a CPA Near You — Get help with Nevada business tax compliance.