Nevada has become a popular retirement destination because of its laid-back Western lifestyle and low rate of taxation. Nevada is one of seven states with no personal income tax of any sort. This means the Nevada residents only have to pay the federal income tax.
Since there is no personal income tax in Nevada, there are no state taxes on retirement or investment income in the Silver State. There are also no capital gains or interest taxes in Nevada. Additionally, there are no inheritance taxes in Nevada.
Nevada Sales Taxes
Nevada makes up for the lack of income taxes by charging a high sales tax. The state sales tax on most retail goods in Nevada is 6.85%. This tax applies to all retail sales in Nevada and affects all businesses. Retirees should realize that groceries, drugs, and prescription drugs are not exempt from the state sales tax in Nevada. Only a few services, like repair work, are exempt from this sales tax.
The sales tax can go even higher because local governments in Nevada are allowed to charge an additional 1.25% in taxes which raises the effective rate of taxation to 8.1%. The tax rate on some products including hotel rooms can go as high as 13% in Nevada.
It is not possible for an individual to get a sales tax exemption in Nevada. Such exemptions are only available for certain organizations and businesses that resale goods.
Nevada Property Taxes
Property tax rates are fairly low in Nevada. The state department of revenue estimated that the average property rate in 2010 and 2011 was 3.1256%. A Comprehensive Breakdown of Property Tax Rates showed that mill levies did not vary widely in different regions.
Property tax rates are fairly low because Nevada generally restricts tax rates. The state is required to cap property taxes at certain rates based on the consumer price index and other factors. This should keep property taxes low in Nevada for the foreseeable future.
There is a Real Property Transfer Tax (real estate sales tax) of 65 cents per $500 in Nevada. This being a relatively low rates, most property owners will not be significantly affected.
Other Nevada Retirement Factors
In addition to be a low-tax state, Nevada has a fairly low cost of living. Property values and rents in the state are low, with the average home in Las Vegas costing around $142,000. Housing prices have fallen dramatically in some parts of the state due to the mortgage crisis.
Historically, Nevada has had quite a few jobs for senior citizens who wanted or needed to work. The gaming industry in Las Vegas and Reno employed many seniors before the 2008 economic meltdown. Since then many of those jobs have vanished.
There is no special protection from debt collection for retirement income in Nevada. The only advantage to moving retirement assets to Nevada would be the lack of income and additional capital gain taxes.
|Cost of Living Rank:||#32|