Tax Abatements Overview

Updated March 2024

About Us:

The Nevada Governor’s Office

of Economic Development

(GOED) was created during the

2011 Session of the Nevada

Legislature through a

collaboration of the Nevada

Governor's Office and the

Leadership of the Nevada State

Senate and State Assembly

(Authority: NRS 231)

Vision:

A vibrant, innovative, and

sustainable economy

Mission:

High-quality jobs for Nevadans

808 West Nye Lane,

Carson City, NV 89703

Phone: (775) 687-9900

1 State of Nevada Way,

4th Floor

s Vegas, NV 89119

Phone: (702) 486-2700

www.goed.nv.gov

Tax Abatements Overview

What are Tax Abatements?

State and local governments across the United States use several types of

tax incentives to encourage private sector firms to create jobs, invest in

communities, and strengthen local industries. Tax abatements are a

reduction of taxes granted by a government entity to a company for a

specific period to encourage economic development.

Tax abatements are discounts, not

a pass for paying taxes. Businesses that

receive tax abatements still pay taxes, but at discounted rate.

No money is given to a company — they receive only a

discount on their tax obligations.

The State of Nevada, through the Governor’s Office of Economic

Development (GOED), offers a variety of tax abatements to help qualifying

companies make the decision to do business in the state.

State of Nevada Tax Abatements:

State of Nevada Tax Abatements are regulatory abatements, regulated by

statute that set criteria for each company to meet to qualify for

abatements (wage, job and capital investment requirement, as well as

offer health insurance for employees).

Companies receiving abatements are entering into a contract (Tax

Agreement) with the State. The contract allows a company to receive a

predetermined reduction in its tax obligations (reduced tax payments) for

a certain period of time.

In return, the company is obligated to meet criteria listed in the contract

and is audited every 2 and 5 years by the Nevada Department of Taxation.

If they are not in compliance with the contract, the company is required to

pay abated taxes back in full.

Tax Abatements are granted to companies to promote economic growth

and diversification by prioritizing firms in industries that drive the

competitive advantage, innovation, entrepreneurship productivity, wage

gains, and economic diversity.

 Tax abatements

are granted to

promote job

growth and

diversification

 Tax abatements

target companies

that would not

otherwise relocate

to Nevada

Tax Abatements Overview

Who Receives Tax Abatements?

Tax Abatements are granted to companies to promote economic

growth and diversification by prioritizing firms in industries that

drive regional competitive advantage, innovation, entrepreneurship

productivity, wage gains, and economic diversity.

GOED and the Regional Development Authorities (RDA) will work

and prioritize those companies that are listed as Targeted Industries

(NAC 360.474).

NAC 360.474 - Factors to Consider when

selecting companies for Tax Abatements:

GOED will consider an application for a partial abatement if the

goals of the applicant are consistent with GOED’s goals related to

industrial development and diversification. GOED’s goals, without

limitation include:

(a) Diversification from the industries of gaming and

leisure/hospitality.

(b) The attraction of basic [export] industries to this State,

including, without limitation, manufacturing, warehousing

and distribution.

services, including, without limitation, corporate

headquarters, facilities for research and development, and

facilities for services such as technical assistance with

products of the business or credit services;

(d) The expansion of existing businesses and industries that

are consistent with the goals described in paragraphs (a), (b)

and (c).

Regional

Development Authority

(RDA)

An entity defined by Nevada

Revised Statutes (NRS) 231.009

as an organization for economic

development that is designated by

the Executive Director of GOED

and is one or more local entities,

a private non-profit entity, or any

combination thereof.

For the list of current RDA’s and

their designated regions go to:

https://goed.nv.gov/regional-

development-authorities/

GOED Board

Chaired by the Governor, The

GOED Board provide oversight

and approves applications for

incentives and tax abatements.

To find more about

GOED’s Board members visit:

www.goed.nv.gov/board

Tax Abatements Overview

How to Apply for Tax Abatements?

Applications should be submitted to GOED’s office ONLY through

the appropriate Regional Development Authority (RDA). RDA’s will

provide an applicant with the most current application and will

assist in filling needed information.

Each application is presented to the GOED Board at bi-monthly

Board Meetings, when members of the board approve or deny

applications.

Tax Abatement Application Process:

Application Intake

The company works directly with the RDA to submit a Tax

Abatement Application to GOED.

Processing and Analyzing

GOED staff will process the application to determine

eligibility and qualifications, as well as perform an

economic analysis of qualifying application to confirm

positive return on investment to the State.

Board Meeting

Applications are then presented at the Board Meeting and

the GOED Board members will approve or deny the

application.

Abatement Agreement and Tax Abatement Package

When approved, the company will complete a contract

with GOED. After signing the contract, the Nevada

Department of Taxation will provide the company a

Taxation Abatement Package to utilize received

abatements.

For Board Meeting dates and application deadlines go to:

www.goed.nv.gov/Incentives.

For more information, please contact GOED’s Business Development Team:

Alex Bacchus, Director of Business

Development: abacchus@goed.nv.gov

Melanie Sheldon, Senior Director of Business

Development: msheldon@goed.nv.gov

Tax Abatements Overview

Tax Abatement Application Process - Timeline:

Board

Meeting

6 weeks

5 weeks

4 weeks

3 weeks

2 weeks

Receiving

application

Processing

and analyzing

application

Public Notice and Letters to

Local government (30 days)

NRS 360.757

Board Members

receive application

Application check

with Regulatory

agencies

3 Day Public Notice

NRS 241.020(2) ( c)

Notification

Letter to

applying

companies

Call with

applicants and

Dept. of

Taxation

Abatement

Contract

Tax

Abatement

Package

1 week

2 weeks

Tax Abatements Overview

Tax Abatement Application Process:

Applications should be submitted to GOED’s office ONLY through the appropriate

gional Development Authority (RDA).

Process Timeline – Description of Process:

1. Received Abatement Applications – (6 weeks before Board Meeting)

The RDA will submit applications from the company to GOED staff.

2. Processing and Analyzing Applications – (5 weeks before the Board Meeting)

GOED staff will determine the application qualification and will work with the RDA to

collect any additional documents needed. GOED staff will also calculate the estimated

abatement amount, as well as fiscal and economic impact of the application. This can

take up to two weeks.

3. Public Notice/Notification Letters to Local Governments – (4 weeks before Board Meeting)

GOED staff will post the 30-day Notice for General Public and notify the applicable local

governments (County, City and School District) about abatements by mail 30 days prior

to the Board Meeting. (NRS 360.757)

4. Letter to Abatement Applicants – (3 weeks before Board Meeting)

GOED staff will prepare notification letter to applying companies to let them know their

applications will be presented and considered at the upcoming Board Meeting by

certified mail. (NRS 241.034)

5. Pre-calls with Abatement Applicants and DOT – (2 weeks prior to Board Meeting)

GOED staff will e-mail prepared applications to appropriate entities for a final review.

They will then schedule a pre-call meeting with company representatives, RDA

representatives, and the Nevada Department of Taxation to go over details of the

upcoming Board Meeting and what to expect if the application is approved.

6. Abatement Applications Review by State Regulatory Agencies – (2 weeks prior to Board

Meeting)

GOED will review the submitted applications with regulators at the Nevada Department

of Business & Industry, the Nevada Department of Conservation & Natural Resources,

the Nevada Department of Taxation, and the Nevada Secretary of State Office to

identify any regulatory issues and resolve them prior to the Board Meeting.

Tax Abatements Overview

Tax Abatement Application Process Continued:

7. Open Meeting Law Posting Notice – (3 days prior to Board Meeting)

Three business days prior to the Board Meeting, GOED will post the Board Meeting

materials to both the GOED and state websites. They will also send an Agenda to

counties, RDA’s and school districts for posting. (NRS 241.020(2)(c)

)

-------------- BOARD MEETING -----------------

8. Prepare Abatement Agreement/Contract – (1 week after the Board Meeting)

The GOED staff will prepare an Abatement Contract to be signed between GOED and

the company receiving the tax abatement.

9. Taxation Abatement Package – (2 – 3 weeks after the Board Meeting)

The executed Abatement Contract will be sent to the Nevada Department of Taxation

and relevant County Assessor’s offices. The Nevada Department of Taxation and

Assessor’s Office will then issue the completed Abatement Package to the company.

Confidentiality of Records and Documents:

When a company submits an application, they can request a confidentiality agreement for

certain categories and parts of application (NRS 231.065).

The confidentiality agreement must be approved by GOED’s Executive Director. The Executive

Director can determine if certain parts of an application (detailed schedule of equipment list or

detailed schedule of employment list) is proprietary information of the business and should not

be public record.

Tax Abatements Overview

Tax Abatement Agreement, Audit Process and Reporting:

Once the Abatement Application is approved, 5 to 7 business days after the Board Meeting

GOED staff will prepare and send an Abatement Contract to the approved company.

Abatement Contract/Agreement: Sets forth contractual terms and requirements for grant of

tax abatements:

1. ABATEMENT AGREEMENT TERMS – The company will agree that approved abatements are conditioned by terms

and requirements listed in the signed agreement;

2. COMPLIANCE AUDIT – The company will provide the Nevada Department of Taxation with access to the books,

records, files and other material needed for the department to carry out abatement compliance audits every 2 and 5

years to monitor and verify the Company’s compliance within the terms of signed agreement.

3. RECAPTURE PROVISIONS - If GOED, in consultation with the Nevada Department of Taxation, decides the company

has failed to comply with the requirements of signed agreement, the company shall repay all granted abatements in

full.

Once the Abatement Contract/Agreement is executed between GOED and Company, the

Nevada Department of Taxation will receive it, and based on the contract they will issue the

Taxation Abatement Package.

Taxation Abatement Package:

The Nevada Department of Taxation will provide the company with a packet that will include

exemption letters and reporting forms “Abatement Returns”.

The company will have to submit these Abatement Returns to the Nevada Department of

Taxation as follows:

 Sales and Use Tax (SUT) Abatement Return – Monthly

 Modify Business Tax (MBT) Abatement Return – Quarterly

 Personal Property Tax (PPT) Abatement Return – Annually

Abatement Audit:

The Nevada Department of Taxation performs an Abatement Compliance Audit every 2 and 5

years from the effective date of Abatement Contract. (NRS 360.755 , NRS 360.225)

Reporting:

GOED prepares and submits a Biennial Report that includes abatements and audit results to the

Nevada Legislature. The report will show all abatements awarded by GOED and the Audit

Compliance Results. (NRS 231.0685)

Tax Abatements Overview

State of Nevada Tax Abatements:

The State/GOED offers Standard Tax Abatements that include sales and use tax abatements on

capital equipment purchases, sales and use tax deferral on capital equipment purchases,

abatements on personal property and modified business taxes, real property tax abatements for

recycling, as well as abatements on aviation parts and data centers.

Standard Abatements (NRS 360.750)

 Sales and Use Tax Abatement (NRS 374.357) - Sales and use tax abatement on

qualified capital equipment purchases, with reductions in the rate to as low as 2%.

 Modified Business Tax Abatement (

NRS 363B.120) - An abatement of 50% of the

1.17% rate on quarterly wages exceeding $50,000.

 Personal Property Tax Abatement (NRS 361.0687) - A

n abatement on personal

property not to exceed 50% over a maximum of 10 years.

 Real Property Tax Abatement for Recycling (NRS 701A.210) - Up to 50% abatement

for up to 10 years on real and personal property for qualified recycling businesses.

Data Center Abatement (NRS 360.754) - A partial abatement from personal

property tax and sales and use tax are available to data center companies that locate or

expand their business in Nevada. Abatements apply to colocated businesses of the data

center.

Aviation Parts Abatement (NRS 360.753) - Partial abatements from Personal

Property and Sales & Use Taxes are available to aviation companies that locate or

expand their business in Nevada.

New: Paid Family and Medical Leave Requirements effective October 1, 2023

(Pursuant to SB1 – 35th Special Session, 2023)

For all incentive applications received after October 1, 2023, the company must meet certain

paid family and medical leave

requirements to receive an abatement. These requirements

state that any business with 50 or more full-time employees on payroll by the 8th calendar

quarter following the quarter in which the abatement becomes effective must have a policy

for paid family and medical leave agreeing that all employees who have been employed by the

business for at least 1 year will be eligible for at least 12 weeks of paid family and medical

leave per year, at a rate of at least 55 percent of the regular wage of the employee.

Tax Abatements Overview

Standard Tax Abatements (NRS 360.750):

Standard Tax Abatements that include sales and use tax abatements on capital equipment

purchases, sales and use tax deferral on capital equipment purchases, abatements on personal

property and modified business taxes, real property tax abatements for recycling:

Qualifying Criteria for Tax Abatements:

To qualify for Standard Tax Abatements a company needs to meet two out of three criteria:

 Average Wage (Statewide Average Wage) – *must meet average wage

 Capital Investment OR

 Number of Primary Jobs Crea

ted

Additionally, the company has to offer medical insurance plan and pay at least 65% of

the plan’s premium costs .

Company Responsibilities:

 Maintain the Business in Nevada for 5 years

 Register Pursuant to the Laws of Nevada

 Generate More than 50% of Revenue from the Project from Outside of the State

*Note: For the most current statewide average wage visit: https://nevadaworkforce.com/.

Sales and Use Tax

Abatement (SUT)

Abatement on qualified capital equipment purchases, with

reductions in the rate to as low as 2%.

Modified Business Tax

Abatement (MBT)

Abatement of up to 50% of the 1.17% rate on quarterly wages

exceeding $50,000.

Personal Property Tax

Abatement (PPT)

Abatement on personal property not to exceed 50% over a

maximum of 10 years.

Real Property Tax Abatement

for Recycling (RPT)

Up to 50% abatement for up to 10 years on real and personal

property for qualified recycling businesses.

Tax Abatements Overview

Standard Tax Abatements – Full vs Partial Tax Abatements:

Based on the wage criteria, a company can qualify for a Full Tax Abatement or Partial Tax

Abatement package.

If a company meets the wage requirement and pays 100% or more of statewide average wage –

they will qualify for Full Tax Abatement.

However, if company is paying 85% - 99% of the statewide average wage, then a company will

qualify for a Partial Tax Abatement package.

Wage Requirement: 100% of Statewide Average Wage 85—99% of Statewide Average Wage

Full Tax Abatements: Partial Tax Abatements:

SUT Abatement

Rate reduced to 2% for new company

and 4.6% for expanding company

Rate reduced to 4.6% for new and

expanding company

MBT Abatement

abatement of 50% for 4 years abatement of 25% for 4 years

PPT Abatement

abatement of 50% for 10 years abatement of 25% for 10 years

Standard Tax Abatements – Urban vs Rural County Criteria:

Additionally, depending on the county in Nevada where company will be locating or expanding

its operations, a different qualifying criteria will be applied between Rural and Urban county

for Tax Abatements.

Urban County Rural County Expansion

Capital

Investment

$5 million for

manufacturing

$1 million for other

industries

$1 million for

manufacturing

$250,000 for other

industries

20% of the value of the

company’s tangible

personal property

Number

of Jobs

50 or more FTE

(No abatements if less

than 10 FT jobs are

created)

10 or more FTE

(No abatements if less

than 6 FT jobs are

created)

10% or more than its

existing employee count or

by 25 (urban) or 6 (rural)

employees, whichever is

greater

Tax Abatements Overview

Data Center Tax Abatement (NRS 360.754):

A partial abatement from personal property tax and sales and use tax are available to data center

companies that locate or expand their business in Nevada. Abatements apply to collocated businesses of

the data center.

A company and co-located tenants who intend to locate or expand a data center in Nevada and meets

certain requirements may qualify for:

 Personal property tax abatement of 75% of the tax due for 10 or 20 years

 Sales and use tax abatement reducing the rate to 2% for 10 or 20 years

quires the Governor’s Office of Economic Development Board to approve a reduction to 2%

by a two-thirds vote. If this is not approved, the abatement will be reduced to 4.6%

The company must meet all three requirements within the first 5 years of operation listed below:

10-year Abatements:

• Jobs: Within 5 years employ 10 full-time employees who are Nevada residents

• Wages: Pay at least 100% of the Statewide Average Wage

• Capital Investment: Within 5 years, invest at least $25 million in cumulative

capital expenditures between the applicant and tenants

20-year Abatements:

• Jobs: Within 5 years employ 50 full-time employees who are Nevada residents

• Wages: Pay at least 100% of the Statewide Average Wage

• Capital Investment: Within 5 years, invest at least $100 million in cumulative capital

expenditures between the applicant and tenants

Co-Located Tenants Must:

 Enter into a minimum two-ye

ar agreement with the applicant to use or occupy space

at the data center

 Obtain a business license issued by the Secretary of State

Company Must:

 Register pursuant to the laws of Nevada and maintain business for 10 years

 Offer medical insurance plan and pay at least 65% of the plan's premium costs

 Ensure that 50% or more of all workers engaged in construction of the data center

are

Nevada residents

Tax Abatement Overview

Aviation Parts Tax Abatement (NRS 360.753):

Companies meeting requirements that include owning, operating, maintaining, servicing,

testing, repairing, overhauling, or assembling an aircraft or any component of an aircraft may

qualify for:

 Personal property tax abatement of 50% of the tax due for 10 years

 Sales and use tax abatement reducing the rate to 2% for 10 years

Requires the Governor’s Office of Economic Development Board to approve a reduction to 2% by a two-

thirds vote. If this is not approved, the abatement will be reduced to 4.6%

New Companies Must:

 Create 5

or more new full-time jobs within one year

In addition to the above requirements the company must meet 1 of the following criteria:

 Make a new capital investment of at least $250,000 within 1 year

 Maintain and possess in this State tangible personal property of not less than

 $5,000,000

 Pay an average wage of at least 100% of the statewide average wage

 The business develops, refines or owns a patent or other intellectual property, or has

 been issued a FAA certificate (14 CFR Part 21)

Existing Companies Must:

 Within 1 year Increase the number of full-time employees by 3% or 3, whichever is

greater

In addition to the above requirements the company must meet 1 of the following criteria:

 Make a new capital investment of at least $250,000 within 1 year

 Maintain and possess in this State tangible personal property of not less than

 $5,000,000

 Pay an average wage of at least 100% of the statewide average wage

 The business develops, refines or owns a patent or other intellectual property, or has

 been issued a FAA certificate (14 CFR Part 21)

Additional Requirements:

 Maintain the business in Nevada for 5 years

 Register pursuant to the laws of Nevada

 Offer medical insurance plan and pay at least 65% of the plan’s premium costs

Tax Abatements Overview

Explanation of Main Terms Related to Tax Abatements:

The Statewide Average Hourly Wage - is determined by the Nevada Department of Employment

and Rehabilitation (DETR) and changes on July 1 of every year https://www.nevadaworkforce.com.

Primary Jobs (NAC 231.363) means a permanent position of employment at a physical location of

a certified entity in this State if:

1. The employee filling that position works an average of at least 30 hours per week;

and

2. Not less than half of the revenue generated at that location is derived from exports

to locations outside of this State.

Urban And Rural Counties in Nevada (NRS 360.750)

 Urban Area — A county whose population is 100,000 or more, or a city whose

population is 60,000 or more.

 Rural Area — A county whose population is less than 100,000 or a city whose

population is 60,000 or less that is located within the geographic boundaries of an area

that is designated as rural by the United States Department of Agriculture and at least

20 miles outside of the geographic boundaries of an area designated as urban by the

United States Department of Agriculture.

Urban Counties:

• Clark County

• Washoe County

Rural Counties:

• Carson City

• Churchill County

• Douglas County

• Elko County

• Esmeralda County

• Eureka County

• Humboldt County

• Lander County

• Lincoln County

• Lyon County

• Mineral County

• Nye county

• Pershing County

• Storey County

• White Pine County

Tax Abatements Overview

Explanation of Main Taxes in Nevada

Sales and Use Tax in Nevada:

Nevada sales tax, local school support tax, and city/county relief tax are imposed on retailers for the

privilege of selling tangible personal property at retail.

Sales tax is measured by gross receipts from retail sales. Use tax is measured by the sales price of the

property. “Gross receipts” and “sales price” means the total amount of the sale including all receipts,

cash, credits, barter or service.

Use tax is imposed upon the storage, use or other consumption in this State of tangible personal

property purchased from a retailer. Use tax is not imposed when the sale of the property to the

consumer is subject to the sales tax. For the most part, use tax rather than sales tax applies to

property purchased outside Nevada, without tax, for transfer, delivery or shipment to a consumer

located in Nevada (https://tax.nv.gov/Forms/Sales___Use_Tax_Forms/_).

Tax Abatements Overview

Explanation of Main Taxes in Nevada

Modified Business Tax in Nevada:

Every employer who is subject to Nevada Unemployment Compensation Law (NRS 612) is also

subject to the Modified Business Tax on total gross wages less employee health care benefits

paid by the employer.

Total gross wages are the total amount of all gross wages and reported tips paid for a calendar

quarter as reported to the Employment Security Division on form NUCS 4072. (Exceptions to

this are non-profit organizations, Indian Tribes, political subdivisions, and employers with

household employees only https://tax.nv.gov/Forms/Modified_Business_Tax_Forms/).

Modified Business Tax has two classifications:

 General Business:

The tax rate for most General Business employers, as opposed to Financial Institutions, is

1.17% on wages after deduction of health benefits paid by the employer and certain wages

paid to qualified veterans. However, the first $50,000 of gross wages is not taxable.

For example:

if the sum of all wages for the 9/15 quarter is $101,000 after health care and qualified veteran

wage deductions, the tax is $596.70 ($101,000 – $50,000 = $51,000 x 0.0117).

A tax return will still need to be filed by all employers, even if the taxable wages are less than

$50,000 and tax due is $0.

 Financial Institution:

The tax rate for financial institutions is 1.554% on the gross wages less employee health care

benefits paid by the employer and certain wages paid to qualified veterans. Financial

institutions are not provided the wage exemption afforded to general businesses and must

report and pay tax at the 1.544% rate on all wages less the deductions.

What entities qualify as Financial Institutions? For definition and detailed information check

(NRS 363A.050).

Tax Abatements Overview

Explanation of Personal Property vs Real Property

Property Taxes in Nevada:

Personal Property is defined in NRS 361.030 and includes “all property of whatever kind or

nature, except vehicles as defined in NRS 371.020, not included in the term “real estate.”

“Real Estate” or “Real Property” is defined in NRS 361.035, and includes land, houses,

buildings, fences, ditches, structures, railroads, other improvements, and property rights.

Real property is further defined in NAC 361.11715 as land, fixtures, improvements; on-site

enhancements; and any rights, interests, benefits and privileges belonging or attached to

the land

To compute the property taxes for a particular parcel of property, simply multiply the

assessed valuation by your county’s tax rate as shown in the following example.

Taxable Value X 35% = Assessed Value X Tax Rate = Property Taxes Due

Personal Property Taxes are calculated in the same manner as real property and are subject

to the same caps as real property.

The taxable values of personal property are calculated by the assessor using the

depreciation schedules adopted annually by the Tax Commission. Upon determination of

the assessed value, the assessor applies the applicable tax district’s combined property tax

rate to the assessed value.

Taxpayers with taxable personal property are required to declare the property to the

assessor each year. Business taxpayers must complete a declaration form, available at the

assessor’s office, upon starting a new business.

The assessor’s office will mail a declaration form to each business annually, after the initial

filing. Business taxpayers must declare all additions and deletions in personal property

annually.