|
|
|
STARTING AND OPERATING A BUSINESS IN NEVADA Copyright © 2004, Michael D. Jenkins
CONTENTS OF THIS SECTION:
I. INTRODUCTION 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 or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to federal corporate taxation, generally. What makes Nevada unique 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 For example, Nevada has repealed its bulk sales law, making it easier and simpler to acquire an existing business by purchase.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 21 "right-to-work" states where workers cannot be forced to join a labor union as a condition of employment with an employer. At present, the state's economy is extremely robust, and the state's population and economy have both been growing at almost breakneck speed for years, with Las Vegas being the most rapidly growing major city in the United States. Despite massive influxes of new residents into the state, the Nevada economy is also quite vibrant in terms of the level of unemployment levels. For example, in June, 2004, the state's unemployment rate was only 4.2%, down from 5.5% a year earlier. This is also well below the national unemployment rate of 5.6% for the same month. 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 formed 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. Because Nevada has no state income taxes, the business profits of your sole proprietorship will not be taxed by the state. However, 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 the amount your firm pays for employee health insurance coverage. See Section IV(b) for information on the Nevada business license and Modifed Business Tax for all types of businesses, including sole proprietorships. (c) 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. However, 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. Your partnership may also need to obtain specialized state professional or occupational licenses, depending upon the type of business in which it will be engaged. 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. 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. For 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 (LLPs) are a 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. To form an LLP in Nevada, you must file a registration form with, and pay a filing fee of $175 to the secretary of state. Foreign LLPs, those created under the laws of another state, must also register with the secretary of state and pay a fee of $175. Every LLP doing business in Nevada, including both domestic and foreign LLPs, must file an initial list and and annual list of managing partners and designation of registered agent, plus pay a fee of $125 with each such list filing. 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 LLPs, if you will do business in other states besides Nevada, is that some states, like California and New York, only recognize certain types of professional partnerships as LLPs. If yours is not a professional partnership, such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
There is no personal income tax in Nevada, so the income of a partnership is not taxed to the individual partners for state income tax purposes. (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 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 intial 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:
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 annual list of officers and directors and designation of registered agent, plus a filing fee of $125 to $11,100 with the secretary of state each year. Failure to file this report on a timely basis could result in suspension or revocation of your corporation's charter. The fee schedule for the annual list filing is as follows, for both domestic and foreign corporations:
Note that Nevada is one of the few states that does not impose a corporate income tax or franchise tax of any kind 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 also discussed in Section IV(b). (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. (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, LLCs 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 LLCs, 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, LLCs and all other forms of business that have employees are also subject to a state Modified Business Tax, based on the company's gross payroll. This tax is also described in Section IV(b). 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 has been amended to recognize the validity of 1-member LLCs, now that the federal tax regulations have made the same modification. Foreign LLCs, 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 LLCs 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. 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 acquiring 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:
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 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:
(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 transpires. In Nevada, you should obtain tax releases for unemployment taxes and sales or use taxes of 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 also, as discussed in Section III(b), that you must also notify the Division at least 5 days in advance of the pending sale or quitting of the business. 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. Request the sales tax release 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. 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. With revenues from gambling casinos providing much of
the state's revenues, it needs relatively little in the
way of taxes from other sources to meet its financing needs.
However, all businesses, except some small home-based
businesses, must obtain a state business license and pay an
annual $100 business license tax.
Nevada also exempts business inventories and supplies
and all kinds of intangible personal property from
property taxation.
In addition, Nevada is a "right-to-work" state, which
means that labor unions may not force employees to become
union members as a condition of employment, thus making it
more difficult for labor to unionize a company's workforce.
However, most of the state's major employers, such as
large casinos, are in fact unionized. (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 governments have also 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 and pay an annual $100 business license fee. The only type of small business that is exempted from obtaining a state business license is a small, home-based business that earns (net income, as shown on federal tax return for the previous year) less than 66 2/3% of the average annual wage. For 2004 the exempt level is $22,000 (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 formerly imposed a state business privilege tax on all employers in the state, imposed at a flat rate of $25 per full time employee per calendar quarter, but this tax was repealed, effective as of October 1, 2003. That tax has been replaced by a new payroll excise tax, the Modified Business Tax, at a rate of of 0.7% from October 1, 2003 until July 1, 2004, and 0.65% beginning July 1, 2004. For financial institutions, the tax rate is 2.0%. Beginning July 1, 2005, certain new or expanded businesses (other than banks) may qualify for a 50% abatement of this tax, for up to four years. The new tax applies to all employers who are subject to Nevada unemployment tax (except Indian tribes), and is based on their total gross payroll, reduced by any amounts paid for qualified employee health insurance. Employers required to pay 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. (Unemployment taxes continue to be paid to the Employment Security Division.) Once you have employees in your business, you should request a copy of Form APP-01.00, Nevada Business Registration, and register for the 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. For information on 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. Accordingly, whether your business is a sole proprietorship, a partnership, an LLC, or a corporation, you will not need to be concerned with any state income or franchise taxes or tax returns in Nevada. However, Nevada does impose a Modified Business Tax on all employers, based on the employer's total gross payroll, reduced by the amount paid for health insurance coverage. See Section IV(b) for a discussion of this business tax on all legal forms of businesses that have employees, incorporated or otherwise. (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 generally 6.5% elsewhere in the state. Combined tax rates are 7.5% in Las Vegas and Laughlin, 7.375% in Reno, and 7% in Carson City. In addition, there is an added 2% tax on transient lodgings and a 6% tax on car rentals. 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 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:
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. However, certain business personal property, such as business inventories and tangible personal property, such as supplies, that will be consumed by the business, are 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 other taxes on businesses, including:
(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. Limited partnerships are specifically exempted from this requirement. 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). For more information on Nevada unemployment taxes and registration requirements for employers, see Section V(c). (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 from the Division of Employment Security. New employers are required to pay tax at a rate of 2.95%, plus an employment training tax of 0.05%, in 2004 on the first $22,000 of wages paid to each employee. The wage base is set each year at 66 2/3% of the average annual wage in the state. After you have had employees for a while, 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). (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 or 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. The owner or a manager of a corporation or limited liability company who receives pay for services performed may elect not to be covered. 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 are 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 provides workers' compensation through a state fund, so that such insurance can now only be obtained through private 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. 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 booklet entitled Nevada Employer's Guide To 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 is the same as the federal minimum, unless the state Labor Commissioner decides that adopting the federal rate would be contrary to the public interest. 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 are exempt from both the state minimum wage and overtime laws. Also, any person paid at least 1.5 times the Nevada minimum wage is exempt from coverage under the Nevada overtime law. 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. 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, 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. Among other health and safety requirements, as an employer in Nevada you must:
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. An employee who quits or is discharged from employment must be paid on the earlier of:
(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 display a poster informing 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 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 poster and information on Nevada civil rights laws for employers from the office of the State Labor Commissioner, 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. 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). 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 or the Department of Business and Industry:
Addresses and other contact information for other key Nevada state government agencies mentioned in this book are listed below for your convenience. SECRETARY OF STATE. Contact the office of the secretary of state for information on:
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.
(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.
(c) Internet Sites. If you have 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 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 constantly, you might also want to search for other Nevada government Web sites by using one of the popular Internet search engines, such as 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: Nevada Department of Taxation: Department of Business and Industry Web page and links to sub-agencies within that Department: 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: Office of the Labor Commissioner (enforces wage-hour, child labor, and other state labor laws): Division of Employment Security, Department of Employment, Training and Rehabilitation (unemployment tax): New Hire Unit (Division of Employment Security): Nevada Workers' Compensation Section (Department of Business and Industry, Industrial Relations Division): Nevada Commission on Economic Development:(d) Financing Sources. For information and help on locating financing for your small business, contact the nearest U.S. Small Business Administration office in Nevada, or contact the following state agency:
|
Copyright © 2004 Michael D. Jenkins
|