STARTING AND OPERATING A BUSINESS IN NEVADA

Copyright © 2008, Michael D. Jenkins
All Rights Reserved

CHAPTER 18

BACK TO STATE CHAPTERS INDEX

NOTE: This is only one of 18 chapters of the electronic book, "Starting and Operating a Business in Nevada." For information on ordering the entire book and the front-end "Small Business Advisor" software, click here.

CONTENTS OF THIS CHAPTER:

I. INTRODUCTION

II. LEGAL ENTITIES

(a) In General
(b) Sole Proprietorships
(c) Partnerships
(d) Corporations
(e) S Corporations
(f) Limited Liability Companies (LLC's)

I. INTRODUCTION

Nevada has a somewhat unusual tax and legal structure under which businesses must operate, one that is notably friendly to businesses and individuals alike.

Like most states, Nevada imposes a sales and use tax, and various excise taxes, plus a Modified Business Tax that is essentially an excise tax based on your company's total gross payroll, reduced by any payments you make for employees' health insurance. As in most states, property taxes in Nevada are imposed and collected at the local level.

The state has also adopted a limited liability company (LLC) law and a limited liability partnership (LLP) law, so that businesses operating in Nevada in LLC form in LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to federal corporate taxation, generally.

What makes Nevada a uniquely attractive place to start or operate a small business are the absence of many taxes and other legal impediments that can negatively affect businesses. While other states boast of low personal or corporate tax rates, Nevada has no personal state income tax, no corporate income tax, and no corporate franchise tax. It also has favorable exemptions from property taxes, such as for business inventories and supplies on hand, and for intangible property. It also has no inheritance taxes.

In addition to its exceptionally favorable tax structure and warm climate, Nevada also has a good business climate in a number of other ways. For example, Nevada has repealed its bulk sales law, making it easier and simpler to acquire an existing business by purchase. Also, Nevada is one of the 22 "right-to-work" states where workers cannot be forced to join a labor union as a condition of employment with an employer, thus making it more difficult for labor unions to unionize a company's workforce. However, most of the state's major employers, such as the large casinos, are in fact unionized.

At present, the state's economy, after a long boom period, is suffering a serious slowdown, largely resulting from the bursting of the "housing bubble" that had driven up residential real estate prices from very reasonable levels a few years ago to absurd levels. It's the situation is being aggravated by soaring gasoline prices and airfares, which have put a crimp on tourism, which is a major sector of the Nevada economy.

The state's population and economy have both been growing at almost breakneck speed for years, with Las Vegas being the fastest growing major city in the United States. Despite massive influxes of new residents into the state, the Nevada economy had until recently remained quite vibrant in terms of the level of unemployment levels, but unemployment in the last year has risen sharply as construction activity and tourist spending has slowed. For example, in May, 2008, the state's unemployment rate had risen to 6.2%, up sharply from 4.7% a year earlier, and now well above the national unemployment rate of 5.5%.

To view the latest federal Bureau of Labor Statistics unemployment rate data for Nevada or any other state, visit the BLS website.

II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS.

(a) In General. A business that operates in Nevada can operate as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. In addition, you can operate as an S corporation, for federal income tax purposes, but this will make no difference for state tax purposes in Nevada, since Nevada has no income tax on either corporations or individuals.

Nevada law also provides for limited liability partnerships, in which no partner is liable for debts of the partnership, in general, as in the case of a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC.

Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below.

(b) Sole Proprietorships. In general, sole proprietorships in Nevada can be established with no formalities. However, as discussed in Section IV(b), it will generally be necessary to obtain a state business license and one or more local business licenses from cities or counties in which you operate and, in some cases, special state occupational or professional licenses, as well. In addition, if you make any sales of tangible personal property at retail or provide certain types of services, you may be required to obtain a sales tax license and collect sales tax, as discussed in Section IV(d).

Because Nevada has no state income taxes, the business profits of your sole proprietorship will not be taxed by the state. Of course, you will still have to report any such income on the Schedule C of your federal Form 1040.

However, if you have employees, you will have to pay the state a Modified Business Tax each quarter, based on the your gross payroll, less a deduction for the amount your firm pays for employee health insurance coverage. See Section IV(a) for information on the Nevada business license and Modified Business Tax for all types of businesses, including sole proprietorships.

Doing business as a sole proprietor in Nevada is generally much simpler than operating as any other kind of business legal entity. As a sole proprietor, if you have no employees, you are not required to pay any unemployment taxes or the Nevada Modified Business Tax, nor withhold any federal or state income tax from wages, nor obtain workers' compensation coverage for yourself. However, if your sole proprietorship operates under an assumed or fictitious business name (trade name), it will be required to register the name with the county or counties where you do business, as discussed in Section IV(g).

(c) Partnerships. Nevada's partnership laws allow creation of either a general partnership, in which all partners are liable for the debts of the business, or a limited partnership, in which only the general partners are liable for debts, while the liability of limited partners is limited to the amount they have invested, usually. State law also allows a general or limited partnership to register to become a limited liability partnership, in which no partner has personal liability, generally.

As discussed in Section IV(b), it will be necessary to obtain a state business license and, in most cases, one or more local business licenses from cities or counties in which you operate, for any type of partnership, including general or limited partnerships, or limited liability partnerships. A partnership may also need to obtain specialized state professional or occupational licenses, depending upon the type of business or profession in which it will be engaged.

There is no personal income tax in Nevada, so the income of a partnership is not taxed at either the partnership level or to the individual partners, for Nevada state tax purposes. However, if a partnership has employees, it will have to pay the state a Modified Business Tax each quarter, based on the firm's gross payroll, less the amount the firm pays for employee health insurance coverage. For more details on this tax, see Section IV(a).

A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:

• How much and what kind of property will each partner contribute to the partnership?
• What value will be placed on the contributed property?
• How will profits and losses be divided among the partners?
• How will gain or loss be allocated for tax purposes on property contributed to the partnership by one or more of the partners, where such property has a tax basis significantly greater or less than its agreed value?
• Will the partnership make an Internal Revenue Code Section 754 election to make special basis adjustments to assets when a partner buys a partnership interest or dies, or when the partnership distributes assets to a partner? (Such an election can be very beneficial for the partner in question or for his or her estate, but once made, the election cannot be revoked without IRS approval. Where a number of events requiring the special basis adjustments occur over a period of years, the tax accounting for the partnership can eventually become grotesquely complicated and extremely difficult to do correctly, unless the partnership is able to retain some exceptionally bright accounting talent to make the necessary tax accounting adjustments.)
• When and how will profits be withdrawn from the partnership?
• How will certain partners be compensated for their services to the partnership (if at all)?
• How will partners be compensated for making capital available to the partnership?
• How will changes in ownership of interests in the partnership be handled?
• When will the partnership terminate its existence?
• How will the assets and liabilities of the partnership be handled when the partnership is terminated?

GENERAL PARTNERSHIPS

As a rule, general partnerships in Nevada can be formed with no formalities, although it is highly advisable to have a written partnership agreement. As discussed in Section IV(b), it will be necessary to obtain a state business license and, in most cases, one or more local business licenses from cities or counties in which you operate, as well. In addition, a partnership or any other business that has employees will generally be subject to the Nevada state unemployment tax, discussed in Section V(b) and the Modified Business Tax on gross payroll, discussed in Section IV(a).

As of July 1, 2006, a general partnership may, if desired, file a Statement of Partnership Authority with the secretary of state, together with payment of the applicable recording fee of $50.00. The Statement of Partnership Authority may list the names of the partners authorized to execute an instrument that transfers real property held in the name of the partnership. It may also state the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership and any other specified matters. It must be signed by at least two partners, who should send a copy to all the other partners.

LIMITED PARTNERSHIPS

A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Nevada law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership, Form 88-ARTS.2003, with the Nevada Secretary of State, together with a filing fee of $75.

Foreign limited partnerships must also register before being allowed to do business in Nevada, and must also pay a registration fee of $75.

Nevada law allows a limited partnership to also register as a limited liability partnership (LLP), in which case it will become a limited liability limited partnership (LLLP), and the general partners will obtain the liability protection of an LLP. The registration fee for a domestic or foreign LLLP is $100, rather than $75 for a regular limited partnership.

Both domestic and foreign limited partnerships are also required to file an initial list and an annual list of general partners and designation of registered agent, and pay an initial or annual filing fee of $125. In the case of an LLLP, the initial list fee is also $125, but the annual list filing fee payable in subsequent years is $175.

For more information on limited partnership filing requirements, see the contact information for the offices of the Nevada Secretary of State, listed in Section VI(a).

LIMITED LIABILITY PARTNERSHIPS

Limited liability partnerships (LLP's) are a relatively new form of partnership permitted under the laws of Nevada. Somewhat like an LLC, an LLP provides a degree of limited liability for its owners, while retaining the tax advantages of a partnership for federal income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. A general partnership can achieve limited liability by simply registering the partnership with the state as an LLP (a Registered Limited Liability Partnership). A limited partnership may also obtain liability protection for its general partners by registering as an LLP, thus becoming a limited liability limited partnership (LLLP).

Under Nevada law until recently, only a partnership that rendered professional services, as defined in NEVADA REVISED STATUTES Section 87.003, could register as an LLP. However, this limitation has repealed, and apparently almost any type of business partnership (general or limited) may now register to became an LLP under Nevada law.

UPDATE NOTE:

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Until recently, Nevada's LLP law provided liability protection for partners in an LLP for liabilities arising out of the malpractice, misconduct, errors or omissions of another partner, but did not clearly protect the partners from all trade debts or other liabilities. However, the law was changed, effective July 1, 2006, to expand the liability protection to such other types of liability.

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To form an LLP in Nevada, you must file a registration form with, and pay a filing fee of $75 to the secretary of state for a general partnership to become an LLP or $100 for a limited partnership to become an LLLP.

Foreign LLP's, those created under the laws of another state, must also register with the secretary of state and pay a fee of $75, or $100 for a foreign LLLP.

Every LLP doing business in Nevada, including both domestic and foreign LLP's, must file an initial list and an annual list of managing partners and designation of registered agent, plus pay a fee of $125 with each such initial or annual list filing. The annual list fee for an LLLP is $175.

For more information on LLP registration and reporting requirements, see the contact information for the offices of the secretary of state, listed in Section VI(a).

Note that one potential drawback of an LLP, if it will do business in other states besides Nevada, is that some states, for example California and New York, only recognize certain types of professional partnerships as LLP's. For example, California only allows law, accounting, and (until January 1, 2012) architectural firms to operate as LLP's. If an LLP is not the right type of professional partnership, New York or California may simply treat the LLP like an ordinary general partnership, with no limitation of liability.

(d) Corporations. To form a corporation in Nevada, you must file articles of incorporation with the Nevada Secretary of State and pay a fee that can range from $75 to $35,000, depending on the par value of your company's authorized stock. No-par stock is treated as having a par value of $1.00 per authorized share of stock. An initial list of officers and directors and designation of resident agent must also be filed, together with a fee of $125.

A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Nevada, by filing an application for a certificate of authority and paying initial filing fees computed in the same manner as for a company that is incorporated in Nevada.

The incorporation fee or registration fee for domestic and foreign corporations, is as follows, based on the dollar value of the par value (or assumed par value) of the stock of the corporation:

             NEVADA INCORPORATION FEE SCHEDULE:

           Par Value of Stock         Amount of Fee
           --------------------       -------------
           $75,000 or less                $  75
           $75,000 - $200,000             $ 175
           $200,000 - $500,000            $ 275
           $500,000 - $1 million          $ 375

If the par value is over $1 million, the fee is $375 plus $275 for each additional $500,000 of stock or fraction thereof, with a maximum fee of $35,000.

For more information on filing articles of incorporation or applying for a certificate of authority to do business in Nevada, see the contact information for the offices of the secretary of state, listed in Section VI(a).

In addition, once your corporation is formed, it will be required to file an initial list and annual list of officers and directors and designation of registered agent, plus an initial filing fee of $125 and an annual list filing fee that is the same as under the incorporation fee schedule (above), except that the minimum fee is $125 and the maximum is $11,100. The initial list and annual list filing fees are the same for a foreign corporation and such fees are also paid to the secretary of state. Failure to file this report on a timely basis could result in suspension or revocation of your corporation's charter. See Section IV(c) for details on how this fee is computed, based on par value of a corporation's stock.

Note that Nevada is one of the few states that does not impose a corporate income tax or franchise tax based on the income on corporations. However, as described in Section IV(b), all businesses in Nevada must obtain a state business license, and in most cases city or county licenses, before commencing business. In addition, all businesses with employees are subject to the Nevada Modified Business Tax, which is a quarterly tax based on the company's gross payroll, less the amount spent on health care insurance. This tax is discussed in Section IV(a).

(e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns.

Since there is no individual or corporate income tax in Nevada, the existence of a federal S corporation election is not relevant for state income tax purposes in Nevada, only for federal purposes.

While an S corporation is not subject to income or franchise tax on its income under Nevada's tax laws, it is subject to the Modified Business Tax if it has employees, as discussed in Section IV(a), and must pay an annual list filing fee each year when filing a list of its officers. The fee is based on the par value of its stock (or the assumed par value, if it has no-par stock), as discussed in Section IV(c).

(f) Limited Liability Companies. Nevada, like every other state in the U.S., has adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Nevada may also choose to operate in the form of an LLC. In most states, including Nevada, LLC's are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes.

As with other forms of business in Nevada, state income taxes are not a concern for LLC's, since there is no state income tax of any kind, corporate or individual, in Nevada. However, your LLC will need to obtain a state business license (discussed in Section IV(b)) before it may legally commence doing business. Also, LLC's and all other forms of business that have employees are subject to the Nevada Modified Business Tax, which is based on the company's gross payroll (less amounts paid for health care coverage). For more details on this tax, see Section IV(a).

To form an LLC under the laws of Nevada, one or more persons must file articles of organization with the Nevada Secretary of State, which must be accompanied by a filing fee of $75.

Nevada state law was amended to recognize the validity of single-member LLC's, once the federal tax regulations were revised by the U.S. Treasury to grant non-corporate tax treatment to single-member LLC's.

Foreign LLC's, those formed under the laws of another state, must obtain a certificate of authority to do business in Nevada, by filing an application for a certificate of authority with the secretary of state and paying a filing fee of $75.

In addition to initial filing fees, all LLC's operating in Nevada, both domestic and foreign, must subsequently file an annual list of managers (or members, if no managers) and designation of registered agent, plus pay an annual report fee of $125 with each such annual report, as well as with the initial list filed at the time of formation or registration.

Nevada's LLC law was amended in 2005 to provide that a limited liability company agreement may now establish or provide for the establishment of one or more designated series of members, managers or limited liability company interests having separate rights, powers or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations. Any such series may have a separate business purpose or investment objective.

This provision, in effect, allows a single "series LLC" to be set up with multiple divisions or "series," each of which can function like a separate legal entity, as long as separate accounting is done for each. Thus, each such "series" may contain a separate business venture, whose losses or bankruptcy will be walled off, in terms of liability, from the other such divisions of the "series LLC." In addition, some tax advisors believe such a single LLC can be set up in place of multiple LLC's and thereby save significant amounts of state taxes in many states where each LLC is subject to special taxes or fees. (However, California's Franchise Tax Board has already announced that in California each such "series LLC" will be taxable as a separate LLC entity, for purposes of California taxes or fees that apply to LLC's that do business there.)

For more information on filing articles of organization and other requirements for an LLC, see the contact information for the offices of the Nevada Secretary of State, listed in Section VI(a).

III. BUSINESS ACQUISITIONS

(a) In General. When you acquire an existing business, there are a number of state legal and tax issues and other matters that you, or, for some items, your business attorney or CPA, should attend to before closing the purchase, to help prevent later, unpleasant surprises. These include matters such as:

• Doing a title search for any real property that is being acquired (your attorney);
• Checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired (your attorney);
• Performing a thorough review of business books and records, including tax returns, payroll records, corporate minute books, and receivables and payables (your accountant, usually);
• Reviewing the status of any leases, contracts, or pending litigation involving the seller, as well as all intangible property rights, such as trademarks, service marks, patents, or copyrights (your attorney);
• Taking a physical inventory of all furniture, fixtures, inventories, equipment and other tangible personal property or real estate, to be sure of exactly what you are buying;
• Having discussions with important customers and suppliers of the business to make sure there are no pending disruptions of relationships with key customers or suppliers; and
• Consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal income tax laws and state tax laws, such as sales/use tax or property tax laws.

Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below.

(b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public.

Nevada is one of the business-friendly states that has repealed its bulk sale laws, so you no longer have to be concerned with this requirement when buying a business in Nevada.

However, note that for any company that is an "employing unit" under the state unemployment compensation law, notice must be given at least 5 days in advance to the Employment Security Division of any planned sale of substantially all of:

• the business;
• the stock of goods;
• the furniture or fixtures;
• the machinery and equipment; or
• the goodwill

of the employing unit. Such notice must be given by the buyer, with details about the transaction, or the buyer will be personally liable for any unpaid unemployment taxes of the seller.

(c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business occurs.

In Nevada, you should obtain tax releases for unemployment taxes and sales or use taxes that may be owed by the seller.

When an employer sells substantially all the assets of its business, it is required to notify the Nevada Division of Employment Security within 10 days and file all required reports and pay all required unemployment taxes. As the purchaser of the business, you must withhold enough of the purchase price to cover any such liability, until such time as the seller provides you a receipt showing that all such taxes have been paid, or a certificate that no tax is due. If you fail to withhold the tax, you are personally liable for it, if the seller fails to pay it.

Note that, as discussed in Section III(b), you or the seller must also notify the Division at least 5 days in advance of the pending sale or quitting of the business, to avoid being liable for any unpaid unemployment taxes owed by the seller.

You will also need to require that the seller provide you with a sales tax release as a condition of closing the sale, so you will not be responsible for any unpaid sales or use tax liabilities of the seller. A sales tax release must be requested from the Nevada Department of Taxation.

(d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. To obtain the seller's favorable experience rating as a successor employer, you will need to notify the Employment Security Division within 90 days after the acquisition, and apply on a timely basis to the Employment Security Division, requesting that you be treated as a successor employer. For this, request Form NUCS-4460, the application for transfer of experience record. (It is not available on the Employment Security Division website.) If yours is a new business, you will have the option of paying unemployment tax at the new employer rate or, if preferable, electing to succeed to the seller's lower experience rate, but both you and the seller will have to execute Form NUCS-4460,, agreeing to the transfer of the seller's experience rating.

PLANNING POINT:

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Besides possibly obtaining a lower unemployment tax rate and experience rating, another clear advantage of being treated as a successor employer is that you may take into account wages already paid to the acquired employees by the former employer during the year of the acquisition. Thus, you will not have to pay tax on the amount of wages paid to an employee in that year by the former employer, who will have already paid unemployment tax on such wages, for which you may take credit, in determining the amount of tax owed on total wages paid to that employee for the year.

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EXAMPLE:

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Employee X has already earned wages equal to or exceeding the current year taxable wage base amount, while employed by the former employer, on which the former employer has paid the unemployment tax. Thus, as a successor employer, your business would not incur any unemployment tax on wages you pay to Employee X for the remainder of the year of the business acquisition.

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IV. NEVADA TAXES AND OTHER GENERAL REQUIREMENTS.

(a) In General. Nevada is one of the most tax-friendly and business-friendly states in America. It imposes no state personal income tax, no corporate income tax, no franchise tax on corporations, and no inheritance tax. Nevada also exempts business inventories and supplies and all kinds of intangible personal property from property taxation. With gambling casino taxes providing much of the state's revenues, Nevada needs relatively little in the way of taxes from other sources to meet its financing needs. However, the state of Nevada does impose a payroll tax, described below, on employers.

UPDATE NOTE:

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Beginning July 1, 2008 all tax payments of $10,000.00 or more to the state of Nevada must be paid through the Nevada Tax on-line system. You may access Nevada Tax on-line at http://www.nevadatax.nv.gov/web/. First time users of the Nevada Tax on-line system should register no less than 3 business days before their payment is due to allow sufficient time to complete the registration process.

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MODIFIED BUSINESS TAX

The state formerly imposed a state business privilege tax on all employers in Nevada, levied at a flat rate of $25 per full time employee per calendar quarter, but this tax was repealed, effective as of October 1, 2003. It has been replaced by a payroll excise tax, the Modified Business Tax, which is currently imposed at a rate of of 0.63% of taxable payroll. The tax rate was 0.65%, but was temporarily reduced to 0.63%, from July 1, 2005 through June 30, 2007, after which time the 0.65% rate was slated to come back into effect. However, legislation in 2007 has made the 0.63% rate permanent. For financial institutions, the tax rate is 2.0%.

Effective since July 1, 2005, certain new or expanded businesses (other than banks) may qualify for a 50% abatement of the Modified Business Tax, for up to four years. Employers must apply to the Commission for Economic Development to obtain this tax abatement, which will only be granted if the new or expanded business will hire at least 15 employees and make a capital investment of $250,000 or more in the state (75 employees and a capital investment of at least $1 million, if locating in counties with 100,000 or cities with 60,000 or greater populations).

The Modified Business Tax applies to all employers who are subject to Nevada unemployment tax (except Indian tribes) and is based on their taxable payroll, which is an employer's total gross payroll, reduced by a deduction for any amounts paid for qualified employee health insurance.

Employers subject to the quarterly business tax must file a Modified Business Tax Return--General, Form TXR-020.01, for each calendar quarter, by the end of the first month of the following quarter, and pay the tax by that date to the Department of Taxation. A return must be filed even if no tax is due.

For state tax forms and tax information, see the contact information for the Nevada Department of Taxation in Section VI(a).

(b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or county. Before you open your business, contact your local city or county hall and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees.

However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. In addition, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and any construction or improvements to an existing structure will usually require a building permit. If you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business, on a regular basis.

STATE LICENSES

State governments have traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Nevada has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing.

In addition to the foregoing licensing requirements, which are typical of most states, Nevada is one of the few states that requires almost all businesses of any kind that wish to operate in the state to first obtain a state business license, for which there is an annual $100 business license fee.

The only types of small businesses that are exempted from obtaining a state business license are landlords renting four or fewer dwelling units or small, home-based businesses that earn (net income, as shown on federal tax return for the previous year) less than 66 2/3% of the average annual wage. For 2008 the exempt level is $25,400 (which is the same as the wage base for unemployment insurance, which is also 66 2/3% of the average annual wage in Nevada).

Nevada also imposes a payroll excise tax, the Modified Business Tax, which is currently imposed at a rate of of 0.63% of payroll (less amounts paid for employee health insurance), as discussed in Section IV(a).

Once you have employees in your business, you should request a copy of Form APP-01.00, Nevada Business Registration, and register for the Modified Business Tax. Form APP Supplemental-01.01 must also be filed by any business that is registering with the Department of Taxation for a state business license or any tax administered by the Department of Taxation. Form APP-01.00 will also serve as your registration for Nevada state unemployment tax and for local business licenses in your city or county, in many cases (for participating local governments).

For assistance with state licensing and business registration requirements in Nevada, see the contact information for the offices of the Nevada Department of Taxation, listed in Section VI(a).

(c) Income and Franchise Taxes. Nevada is one of the few states that does not have either a corporate or individual income tax, or a corporate franchise tax on income.

TAXATION OF SOLE PROPRIETORS AND PARTNERSHIPS

Because there is no state income tax on individuals, corporations, or other business entities, a sole proprietorship or partnership does not need to be concerned with any state income taxes or tax returns in Nevada. However, as discussed in Section IV(a), Nevada does impose a Modified Business Tax, based on payroll, on employers, including sole proprietorships or partnerships.

TAXATION OF CORPORATIONS

Nevada does not impose an income tax on corporations. However, it does impose an annual list filing fee on corporations, based on the par value (or assumed par value) of a corporation's stock. This fee can be as much as $11,100 a year.

The fee schedule for the annual list filing is as follows, for both domestic and foreign corporations:

   ANNUAL LIST FILING FEE SCHEDULE FOR CORPORATIONS:

     Par Value of Stock         Amount of Fee
     --------------------       -------------
     $75,000 or less                $ 125
     $75,000 - $200,000             $ 175
     $200,000 - $500,000            $ 275
     $500,000 - $1 million          $ 375
     Over $1 million                $ 375 plus $275 for 
                                      each $500,000 or 
                                      fraction, with a 
                                      limit of $11,100

(Stock that has no par value is treated as having a par value of $1.00 per authorized share of stock.)

A similar fee, which can be as much as $35,000, is imposed at the time of incorporation, when a business incorporates in Nevada or a foreign corporation registers for authority to do business in the state, as discussed in Section II(d).

Also, Nevada imposes the Modified Business Tax on all employers, including corporations, based on the employer's total gross payroll, reduced by the amount paid for health insurance coverage. See Section IV(a) for a discussion of this business tax on all legal forms of businesses that have employees, incorporated or otherwise.

S corporations are treated the same as other corporations for Nevada tax purposes. That is, they are not subject to state income tax, since there is no Nevada state income tax, but they are subject to the annual list fee (described above) and, if they have employees, are subject to the Modified Business Tax on their payroll, to the same extent as other corporations.

TAXATION OF LIMITED LIABILITY COMPANIES

As there is no state income tax on either individuals or corporations in Nevada, limited liability companies (LLC's) and their members are not required to file any kind of Nevada state income tax returns. However, as discussed in Section IV(a), all employers, including LLC's, are subject to the Nevada Modified Business Tax, which is based on their gross payroll, less amounts paid, if any, for qualified employee health insurance.

(d) Sales and Use Tax. Nevada imposes a general sales tax on retail sales of tangible personal property and certain types of services at the statewide rate of 6.5%, which consists of a state tax of 2% and a uniform local tax of 4.5%. In addition, some local governments are allowed to adopt additional local sales taxes, so that the combined state and local tax rate is 7% or higher in most urban counties, and is at least 6.5% elsewhere in the state. Combined tax rates are 7.75% in Las Vegas (Clark County), 7.375% in Reno (Washoe County), and 7.125% in Carson City and in White Pine County.

In addition, there are added state and local taxes on transient lodgings and on car rentals. On July 1, 2009, the room tax on lodgings in Clark and Washoe Counties is increased by up to 3%.

Sellers are required to obtain a seller's permit and to collect and pay over the state and local sales and use taxes to the Nevada Department of Taxation. There is no fee imposed for a seller's permit.

There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer.

You can obtain blank resale certificate forms at most stationery stores, or you can make up your own, which should look like this:

The description of the property to be purchased must include either:

• An itemized list of the property to be purchased for resale; or
• A general description of the kind of property to be purchased for resale.

Nevada sales tax now generally applies to delivery charges in connection with a sale of taxable property, even if the delivery charges are separately stated. However, if the charge does not pertain to any preparation, handling, crating or packing services prepared by the seller before shipment and is separately stated on the invoice, the charge is not taxable.

A shadow tax, the use tax, is also imposed at the same rate as the sales tax. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Nevada. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold.

Before making any taxable sales, you will need to register with the state Department of Taxation on Form APP-01.00, Nevada Business Registration, and obtain a sales tax permit for each place of business in Nevada.

For more information on Nevada sales and use tax registration and compliance, see contact information for the offices of the Department of Taxation in Section VI(a).

(e) Real and Personal Property Taxes. In Nevada, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due.

Nevada also imposes personal property taxes on tangible personal property. ("Personal property" is any kind of property that is not real estate.) However, certain kinds of business personal property such as business inventories held for sale are exempt. In addition to inventories held for sale, inventories of supplies that will be consumed by the business in the manufacturing process are also exempt from personal property tax in Nevada.

While Nevada generally taxes tangible personal property, it does not impose a property tax on intangible personal property such as stocks, bonds, promissory notes, and other such paper assets, generally, except in the case of banks and certain other lenders and financial institutions.

(f) Other Business Taxes. Nevada imposes a number of excise and other taxes on businesses, including:

• The Modified Business Tax on payroll, discussed in Section IV(a);
• Taxes on alcoholic beverages;
• Cigarette and tobacco products taxes;
• Gasoline and other fuel taxes;
• Motor vehicle registration taxes and fees;
• A conveyance tax on real estate transfers, at the rate of 65 cents per $500 of valuation, or fraction thereof, or at a rate of $1.25 in counties of more than 400,000 population; Since October 1, 2003, an additional state transfer tax of $1.30 per $500 of valuation on each deed applies, and counties with a population of less than 400,000 may tack on an additional local tax of 5 cents per $500 of valuation.
• Various gambling and casino taxes;
• Effective on and after October 1, 2003, a Live Entertainment Tax of 10% on live entertainment shows (5% tax where seating capacity is 7,500 or more patrons), except the tax does not apply to non-gaming facilities with a seating capacity of less than 200 patrons, or 300 patrons before July 1, 2005 (the definitions based on seating capacity have been changed under 2005 legislation to now reflect a facility's maximum occupancy); the tax also does not apply to certain gaming establishments with maximum occupancy for live entertainment of less than 200 patrons, if the establishment is licensed for fewer than 51 slot machines or fewer than 6 games;
• A "pick-up" estate tax equal to the federal estate tax credit for state death taxes, which currently is zero, so that in reality Nevada does not impose any death tax at present (although the federal credit may be reinstated after 2010, in which case the Nevada tax would apply once again);
• Severance taxes on natural resources; and
• Various other taxes on special kinds of businesses, such as insurance companies and utility companies.

(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group."

In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name.

In Nevada, all businesses, except limited partnerships, that operate under an assumed or fictitious business name are required to file a fictitious name statement with the county clerk in each county where business is conducted. It must be filed within one month after the commencement of business under the fictitious name. Counties may provide that a fictitious name registration expires after 5 years and must be renewed at that time, if still in use.

Limited partnerships are specifically exempted from the fictitious name registration requirements.

A business that is required to register a fictitious or assumed name but fails to do so is guilty of a misdemeanor and also is barred from bringing a suit in the Nevada court system until the fictitious name is registered.

V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES

(a) Employer Registration and Withholding. If you have any employees, you will be required to withhold federal income tax and FICA taxes from their wages, but since Nevada has no state income tax or other tax on wages, you will not need to be concerned with any obligation to withhold state income tax. However, if you pay more than a minimal amount of wages, you will most likely be required to pay state unemployment tax, and will have to register with the state as an employer for unemployment tax purposes, as described in Section V(b), and to pay the Modified Business Tax on your gross payroll, as described in in Section IV(a).

For more information on Nevada unemployment taxes and registration requirements for employers, see Section V(b).

(b) Unemployment and Other State Payroll Taxes. If your business has one or more employees and your payroll amounts to $225 or more in any calendar quarter, you, as an employer, will be required to pay state unemployment tax based on the amount of such wages paid.

Employers subject to the Nevada unemployment tax are required to register with the state by completing the Nevada Business Registration, Form APP-01.00, which you can obtain from either the Department of Taxation or the Division of Employment Security.

New employers are required to pay tax at a rate of 2.95% in 2008 on the first $25,400 of wages paid to each employee. The taxable wage base is set each year at 66 2/3% of the average annual wage in the state, which is $25,400 for 2008. A Career Enhancement Program tax of 0.05% also applies, generally, making the total new employer tax rate 3% of covered wages in 2007.

After you have had employees for 14 to 17 calendar quarters (depending on the quarter in which you became subject to unemployment tax), you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying.

All state unemployment taxes are imposed upon you as the employer, and, under Nevada law, cannot be charged to your employees or withheld from their wages.

For more information on your Nevada unemployment tax obligations as an employer, see the contact information for the offices of the Employment Security Division of the Nevada Department of Employment, Training, and Rehabilitation, which is listed in Section VI(a).

Note that any employer that is subject to Nevada unemployment tax must also pay the state Modified Business Tax on gross payroll. For more details on the Modified Business Tax, see Section IV(a).

(c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state.

Recent Nevada legislation now allows for associations of five or more private employers to band together and self-insure, which can make it more feasible to self-insure. The employers must be in the same or a similar employment classification, must be members of a bona fide trade association that is incorporated in Nevada and which has been in existence for at least five years, and must obtain a certificate from the Labor Commissioner permitting them to self-insure.

In Nevada, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor is generally not considered an employee, but must be covered if a licensed contractor, or engaged in fulfilling a contract with the state. However, a sole proprietor may choose to elect coverage, if desired. An officer or a manager of a corporation or limited liability company who is an owner and receives pay for services performed may elect not to be covered, and an officer or manager who does NOT receive pay for services performed may also elect out of coverage.

In addition, licensed real estate brokers and real estate salespersons are generally exempt from workers' compensation coverage requirements, but may elect coverage.

IMPORTANT NOTE:

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Nevada law requires a person to provide workers' compensation not only for employees but for subcontractors, independent contractors, and their employees. Such contractors are deemed to be employees of the prime contractor unless the subcontractor is an "independent enterprise." To pass the "independent enterprise" test, the subcontractor must hold himself or herself out as a separate business by having a separate business or occupational license or by owning or renting property used in the business. In addition to being a separate business, the work being performed must be the type of work normally done by an independent contractor rather than by employees.

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A principal contractor can avoid liability for injuries sustained by an independent contractor (subcontractor) or by injuries to an employee of an independent contractor, but only if all the following requirements are met:

• A written contract is entered into between the principal contractor and the independent contractor, specifying that the independent contractor will maintain workers' compensation coverage;
• Proof of such coverage is provided to the principal contractor;
• The principal contractor is not engaged in any construction project; and
• The principal contractor and the independent contractor are not in the same trade, business, occupation, or profession.

Failure of an employer to secure or maintain workers' compensation coverage for employees is a gross misdemeanor for the first offense. For a second offense, or for a first offense where an uninsured employee incurs a substantial bodily injury or is killed, a felony charge is possible, with penalties of imprisonment and a fine of up to $50,000.

Until July 1, 1999, all companies other than those who were self-insured were required to obtain insured coverage from the State Industrial Insurance System (SIIS). Since that date, employers have had the option of obtaining coverage from approved private insurance carriers. Since January 1, 2000, Nevada no longer has provided workers' compensation through a state fund, so that such insurance can now only be obtained through private insurance carriers.

Because the coverage rules are so complex and technical, the Industrial Relations Division recommends that you contact them to find out if you are required to provide workers' compensation coverage in your business, or for particular persons.

Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job-related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees.

Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance.

As an employer, you must notify injured employees of their benefits and post a notice in the workplace informing your employees of their workers' compensation coverage and make sure that your proof of insurance is available at all times for inspection, upon request by the Industrial Relations Division.

You must also file workers' compensation Form D-21, Fatality Notice, to report any job-related fatality.

For more detailed information regarding your obligations as an employer under the Nevada workers' compensation laws, contact your insurance carrier or see the contact information for the offices of the Industrial Relations Division, listed in Section VI(a), to request a copy of the helpful brochure, entitled An Employer's Guide To Nevada Workers' Compensation Insurance.

(d) State Wage and Hour Laws. Some employees of certain small firms not engaged in interstate commerce are not covered by the federal minimum wage and overtime laws. However, even if few or none of your employees are covered by the federal wage-hour laws, if, for example, because your firm does less than $500,000 a year in gross sales and the employees in question are not deemed to "...engage in (interstate) commerce...," they will still generally be subject to the Nevada wage-hour laws, which provide for a state minimum hourly wage that until recently was the same as the federal minimum, unless the state Labor Commissioner decided that adopting the federal rate would be contrary to the public interest. A 2004 change that proposed an increase in the state minimum wage to $6.15 starting in 2007, adjusted yearly thereafter, required re-approval in 2006 to become law.

UPDATE NOTE:

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In the November, 2006 election, Nevada voters approved an amendment to the Nevada Constitution (Nevada Question 6) which required employers to pay at least $6.15 per hour worked if the employer does not provide health benefits. The employer could still pay the federal minimum wage of $5.15 if health benefits were provided. Rates are adjusted yearly by the amount of increase in the federal minimum wage over $5.15 per hour, or, if greater, by the cumulative increase in the cost of living measured by the Consumer Price Index (CPI), with no CPI adjustment for any one-year period greater than 3%.

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Effective July 1, 2008, the Nevada minimum wage was increased to $6.85 an hour or, for employees to whom qualifying health benefits have been made available by the employer, $5.85 an hour. Note that, unlike federal law and most states' laws, Nevada law does NOT allow tips to be credited toward meeting the statutory minimum wage.

Employees who work more than 40 hours in a week are generally entitled to receive overtime pay at a rate of time-and-a-half and employees who earn less than 1.5 times the minimum wage ($8.775 per hour if provided health benefits or $10.275 per hour if not, effective July 1, 2008) may be entitled to daily overtime pay if they work more than 8 hours on any one day. No daily overtime pay is required if an employee works a scheduled four day week, 10 hours a day, pursuant to an agreement between employer and employee. Where an employee works more than 8 hours in a day and is entitled to daily overtime pay and also works more than 40 hours in the same week, the employer may deduct the daily overtime hours from the weekly overtime hours, so that the employee is not paid overtime twice for the daily overtime hours worked.

Note that, as under federal wage-hour laws, certain classes of executive, administrative, and professional employees are exempted from the Nevada overtime pay rules, and outside sales persons paid on commission are exempt from both the state minimum wage and overtime laws. Also, a salesperson in a retail business whose regular rate is more than 1.5 times the minimum wage and who earns more than half of his or her income from commissions is exempt from coverage under the Nevada overtime law.

The Nevada overtime law does not apply to enterprises with gross annual sales volume of less than $250,000.

Besides the federal wage-hour poster that you must display in the workplace, you must also display a state wage law poster, which you can obtain from the Nevada State Labor Commission.

STATE CHILD LABOR LAWS

In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Nevada.

Nevada law generally prohibits any child under age 16 from working more than 8 hours a day or 48 hours a week, except on a farm, in domestic service, or as a performer in a motion picture.

Children under the age of 14 may not be employed when school is in session (except as a performer in a motion picture), and generally may not be employed at all without the written permission of the district judge in the county of the child's residence, except for farm, domestic, or motion picture work.

Minors under age 18 are barred from working in many jobs and industries that may be immoral, injurious to health, or dangerous to them. This includes a prohibition on minors working in area of casino where there is gaming or where sale of alcoholic beverages is the primary commercial activity, unless the minor is providing entertainment pursuant to an employment contract.

(e) State Occupational Safety and Health Laws. Approximately half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within such states.

Nevada is one of the states that has its own OSHA-type agency. Its health and safety plan received final federal approval as of April 18, 2000, and the federal OSHA agency has relinquished its responsibility for administering OSHA provisions in Nevada. The Nevada agency that enforces job safety and health compliance in the state is also called OSHA, the Occupational Safety and Health Administration, which is the state agency that publishes health and safety regulations.

In addition to providing a workplace that is free of recognized hazards that are causing or likely to cause death or physical harm to employees, as an employer in Nevada you must:

• Post required posters in the workplace;
• Assign at least one person to be in charge of occupational safety and health;
• If you have more than 10 employees or are engaged in the manufacture of explosives, adopt a written safety program, which includes safety training;
• If you have more than 25 employees or are engaged in the manufacture of explosives, create a safety committee; and
• Report any fatal accidents, or any accident where three or more employees require hospitalization, within 8 hours to Nevada OSHA.

To determine if your workplace is in compliance with federal and Nevada job safety requirements, you may wish to contact the Division of Industrial Relations, Safety Consultation and Training Section (SCATS) and request a free on-site safety consultation. You will not be cited for any violations detected, provided that you promptly correct the unsafe conditions. This differs from the rules for consultations by federal OSHA inspectors, who are required to cite you for any violations they find. Also, state consultants will not report you to federal OSHA, and will not "guarantee" that your business will pass a federal OSHA inspection.

For information on your job safety and health obligations as an employer, required posters, and possible on-site safety consultations, see the contact information for the offices of the Division of Industrial Relations of the Nevada Department of Business and Industry, listed in Section VI(a).

(f) Other Miscellaneous State Labor Laws. Other Nevada labor laws you need to be aware of, as an employer, include the following:

(1) Wage payments to employees. State law requires that employers pay wages semi-monthly, or more frequently. An exception is made for employers who have their principal place of business and prepare their payrolls outside of Nevada, who need only pay their executive, professional, and administrative employees, outside salespersons, and supervisory personnel once a month.

Employers must prominently post payday notices in at least two conspicuous places in the workplace, where they can be seen by employees. The notices must describe the time and place of payment of wages.

An employee who is fired or discharged by the employer must be paid his or her final wages immediately. An employee who quits or resigns from employment must be paid on the earlier of:

• The next regular payday; or
• Seven days after termination of employment.

If an employer fails to pay final wages when they are due, the former employee is entitled to continued full wages from the time the final wage payment was due until payment of all wages owed is made, for up to 30 days of wages.

Neither the employer nor the employee must give notice to the other before terminating employment. Nevada is an "employment-at-will" state.

Nevada law also mandates rest periods for employees, based on the total hours worked daily, at the rate of 10 minutes for each 4 hours worked, according to the Nevada statute (or for each 3 1/2 hours worked, according to the Labor Commissioner's website, an apparent error). An unpaid meal period of 30 minutes of uninterrupted time must be allowed for an employee working a continuous period of 8 hours.

(2) Right-to-work laws. Nearly half the states in the U.S. have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues.

Nevada has a right-to-work law.

(3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Nevada, and must display a poster informing their employees of their rights. Nevada state law prohibits discrimination in employment on the basis of race, religion, gender, age, sexual orientation, disability, or national origin. The state law applies to any employer who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year (but excludes Indian tribes from the definition of employer under this law).

You can obtain the required state anti-discrimination poster and information on Nevada civil rights laws for employers from the office of the Nevada Equal Rights Commission, at the address listed in Section VI(a).

(4) Reporting new hires. Under federal welfare reform laws, employers in all states are now required to report newly-hired (or rehired) employees to a designated state agency (the New Hire Unit of the Department of Employment, Training, and Rehabilitation for Nevada employers) within 20 days after the date of hire. Reports must be filed twice a month if filing electronically (if needed), on dates not more than 16 days nor less than 12 days apart.

See the contact information for New Hire Reporting in Section VI(a), and the website URL for the New Hire Unit in Section VI(c).

(5) Employment of illegal aliens. A Nevada law enacted in 2007 provides that if an employer with a state business license is found by the federal government to have engaged in the unlawful hiring of an unauthorized alien, that the Nevada Tax Commission will hold a hearing to determine whether such hiring was willful, flagrant, otherwise egregious and, if so, may impose fines or other penalties. The state has established a website where an employer may check the validity of an employee's Social Security number, and an employer will generally not be sanctioned if such a check indicated the Social Security number was valid.

VI. STATE SOURCES OF HELP AND INFORMATION

(a) Key State Agencies Contact Information. To obtain business registration forms and information on starting or relocating your business in Nevada, contact the Nevada Small Business Development Center (see Section VI(b)) or the Nevada Department of Business and Industry:

Department of Business and Industry
555 East Washington Avenue, Suite 4900
Las Vegas, Nevada 89101
(702) 486-2750
(702) 486-2758 (Fax)

Addresses and other contact information for other key state and federal government agencies in Nevada, mentioned in preceding sections of this book, are listed below for your convenience.

SECRETARY OF STATE. Contact the office of the secretary of state for information on:

• Filing a Statement of Partnership Authority
• Limited partnership filings and information
• Limited liability partnership (LLP) filings and information
• Corporate filings, including articles of incorporation, and information on corporations
• Limited liability company (LLC) filings, including articles of organization, and information on LLC's

Nevada Secretary of State
Commercial Recording
202 N. Carson Street
Carson City, NV 89701
(775) 684-5708
(775) 684-5725 (Fax)

-or- (accepts expedite requests only)

Nevada Secretary of State
Commercial Recordings Division
Corporate Satellite Office
555 East Washington Ave. Suite 4000
Las Vegas, NV 89101
(702) 486-2880
(702) 486-2888

TAXES. Obtain Modified Business Tax, sales and use tax, and other miscellaneous business tax forms, instructions and information from the Nevada Department of Taxation, which is the main tax collection agency in Nevada.

Nevada Department of Taxation
1550 College Parkway, Suite 115
Carson City, NV 89706
(775) 684-2000
(775) 684-2020 (Fax)

STATE LABOR LAWS. Contact the following agency about your obligations as an employer under various state labor laws, including:

• Nevada wage-hour laws
• Nevada child labor laws and regulations
• State anti-discrimination laws
• Other miscellaneous Nevada labor laws

Office of the Labor Commissioner
Department of Business and Industry
Division of Industrial Relations
555 E. Washington Avenue
Suite 4100
Las Vegas, Nevada 89101-1050
(702) 486-2650
(702) 486-2660 (Fax)
E-mail: mail@LaborCommissioner.com

STATE LICENSES. The following agency is the umbrella agency for many state regulatory functions in Nevada. If you are not sure where else to turn for information on state government licensing or regulations, contact either this agency, or the Nevada Small Business Development Center.

Department of Business & Industry
555 E. Washington Ave., Ste. 4900
Las Vegas, NV 89101
(702) 486-2750
(702) 486-2758 (Fax)

STATE SALES TAX. Obtain your sales and use tax license or permit and information on the Nevada sales and use tax law, from the Nevada Department of Taxation, at the address listed above for that agency.

EMPLOYER WITHHOLDING. Since there is no state income tax in Nevada, there is no state employer withholding tax required. Contact the nearest U.S. Internal Revenue Service office for information on federal income tax withholding, if you have employees.

STATE UNEMPLOYMENT TAX. Contact the following state agency to determine whether you are an employer subject to payment of state unemployment taxes, and for registration as an employer if you are subject.

Status Unit
Department of Employment, Training, and Rehabilitation
Employment Security Division
500 E. Third St.
Carson City, NV 89713
(775) 684-6310
(775) 684-6329 (Fax)

NEW HIRE REPORTING. Report newly hired employees within 20 days (or report twice a month, if filing electronically) to the New Hire Unit, by mail or fax or electronically, at the following address:

Department of Employment, Training, and Rehabilitation
Employment Security Division -- New Hire Unit
500 E. Third St.
Carson City, NV 89713-0033
(775) 684-6370
(888) 639-7241 (Toll-free)
(775) 684-6379 (Fax number for faxed reports)

WORKERS' COMPENSATION INSURANCE. If you employ workers for whom you must supply workers' compensation coverage, contact the following agency for further information, and to request their helpful booklet, Nevada Employers Guide To Workers' Compensation Insurance:

Department of Business and Industry
Division of Industrial Relations
Workers Compensation Section
400 West King Street, Suite 400
Carson City, NV 89703
(775) 684-7260
(775) 687-6305 (Fax)

STATE OSHA PROGRAM. For information on both federal and state occupational safety and health laws that affect you as an employer in Nevada, or for information on workers' compensation insurance, contact:

Division of Industrial Relations
Department of Business and Industry
1301 Green Valley Parkway, Suite 200
Henderson, Nevada 89074
(702) 486-9120
(702) 990-0360 (Fax)

STATE ANTI-DISCRIMINATION LAWS. Contact the following state agency for more detailed information on Nevada civil rights laws that may apply to your business, and to obtain anti-discrimination notices you are required to post in the workplace:

Nevada Equal Rights Commission
Department of Employment, Training, and Rehabilitation
1515 E. Tropicana Ave., Suite 590
Las Vegas, 89119
(702) 486-7161

(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Nevada to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you.

Nevada Small Business Development Center
University of Nevada -- Reno
College of Business Administration/032
Nazir Ansari Building 032, Room 4
Reno, NV 89557-0100
(775) 784-1717
(775) 784-4337 (Fax)

(c) Internet Sites. For anyone with access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major Nevada state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Nevada.

Since new sites are appearing frequently, you might also want to search for other Nevada government Web sites by using one of the popular Internet search engines, such as Google, Excite! or Yahoo.

To start your Internet search for Nevada government information, you may want to begin with the following Internet sites:

Nevada state government home page:
www.nv.gov/

Nevada Department of Taxation (state tax forms and information):
http://tax.state.nv.us/

Nevada Secretary of State (corporate, partnership, and LLC filings):
http://sos.state.nv.us/

Department of Business and Industry (Web page and links to sub-agencies within that Department, including the Secretary of State):
http://dbi.state.nv.us/

Division of Industrial Relations (part of the Department of Business and Industry -- Information on workers' compensation and job safety and health laws affecting employers in Nevada):
http://dirweb.state.nv.us/

Office of the Labor Commissioner (enforces wage-hour, child labor, and other state labor laws):
www.laborcommissioner.com

Division of Employment Security, Department of Employment, Training and Rehabilitation (unemployment tax):
http://detr.state.nv.us/es/es_index.htm

New Hire Unit (for filing new hire reports with the Division of Employment Security):
https://uitax.nvdetr.org/crphtml/new_hire_info.htm

Nevada Workers' Compensation Section (Department of Business and Industry, Industrial Relations Division):
http://dirweb.state.nv.us/WCS/wcs.htm

Nevada Commission on Economic Development (information and assistance in starting or expanding a business in Nevada):
www.expand2nevada.com

(d) Financing Sources. For information and help on locating financing for your small business, contact the U.S. Small Business Administration office in Nevada, or contact the following state agency:

Nevada Commission on Economic Development
108 E. Proctor
Carson City, Nevada 89701
(800) 336-1600 (Toll-free)
(775) 687-4325

The address of the SBA District Office in Nevada is:

U.S. Small Business Administration
400 South 4th Street, Suite 250
Las Vegas, NV 89101
(702) 388-6611
(702) 388-6469

Copyright © 2008 Michael D. Jenkins
Nevada chapter last full revision date: July 5, 2008