Nevada does not impose an income tax on partnerships or partners

# Summary

Nevada does not impose an income tax on partnerships, and does not tax a partner's distributive share of partnership income. There is no Nevada partnership income tax return.

Because Nevada has no individual income tax, the machinery that exists in other states to collect tax on nonresident partners has no counterpart here: there is no Nevada composite return, no nonresident withholding on distributive shares, and no pass-through entity tax election, because there is no Nevada income tax for such a regime to collect or credit against.

What does apply at entity level is the Commerce Tax and, for partnerships with employees, the Modified Business Tax. Partnerships are named expressly in the Commerce Tax's definition of a taxable business entity.

# Nevada Department of Taxation statement

The Department's official newsletter, Nevada Tax Notes, Issue No. 194 (January 2023), states:

"The State of Nevada does not impose an individual or business income tax."

That covers both halves of the pass-through question — the entity is not subject to a business income tax, and the partner is not subject to an individual income tax on what flows through. The Department's "Income Tax in Nevada" page separately confirms for the individual side that Nevada residents "do not pay state tax on income earned from salaries, wages, or similar compensation."

# The entity and the partner are protected by different things

A partnership determination has two halves, and in Nevada they rest on different authority. Getting this backwards is the most likely way to misstate Nevada's position.

The partner. Nev. Const. art. 10, § 1(9) provides that "No income tax shall be levied upon the wages or personal income of natural persons." An individual partner's share of partnership income is personal income of a natural person, so the constitution itself protects it. Taxing it would require a constitutional amendment.

The partnership. The same subsection continues: "Notwithstanding the foregoing provision, and except as otherwise provided in subsection 1 of this Section, taxes may be levied upon the income or revenue of any business in whatever form it may be conducted for profit in the State." The phrase "in whatever form it may be conducted" reaches a partnership as squarely as a corporation. Nothing in the constitution prevents Nevada from taxing partnership income; the legislature simply has not.

So the partner-level answer is constitutionally durable and the entity-level answer is not. Nevada could impose an entity-level income tax on partnerships by ordinary legislation — and it has already used this authority once, to levy the Commerce Tax on business gross revenue.

# The Commerce Tax does reach partnerships

NRS 363C.20(1) defines "business entity" to include, by name, "a corporation, partnership, proprietorship, limited-liability company, business association, joint venture, limited-liability partnership, business trust, professional association, joint stock company, holding company and any other person engaged in a business."

Partnerships and limited-liability partnerships are therefore squarely within the Commerce Tax. NRS 363C.200(1) imposes it "[f]or the privilege of engaging in a business in this State ... upon each business entity whose Nevada gross revenue in a taxable year exceeds $4,000,000." The Department's Commerce Tax page confirms the tax "applies to revenue generated in Nevada" and reaches "entities such as corporations, partnerships, and sole proprietorships."

This is a gross revenue tax, not an income tax: it is measured without regard to the partnership's net income or the partners' shares, and a partnership with no taxable income can owe it. Entities at or below $4,000,000 of Nevada gross revenue are not required to file (NRS 363C.200(2)).

A partnership that pays wages also owes the Modified Business Tax under NRS 363B.110 — 1.475 percent of quarterly wages above $50,000.

# Filing consequences

There is no Nevada partnership income tax return, no Nevada Schedule K-1 equivalent, and no Nevada filing obligation arising from a partner's distributive share.

A nonresident partner of a Nevada partnership owes no Nevada income tax on that partnership income. A Nevada-resident partner of an out-of-state partnership likewise owes no Nevada income tax on it — though that partner may owe income tax to the state where the partnership does business, which this determination says nothing about.

Entity-level Department obligations remain: a commerce tax return where Nevada gross revenue exceeds $4,000,000 for the taxable year, and Modified Business Tax returns where the partnership pays wages.

# Coverage and verification

Tax years covered: 2025.

Verified on 2026-08-13 against Nevada Tax Notes Issue No. 194, the Department's "Commerce Tax" and "Income Tax in Nevada" pages as then published, the Nevada Constitution as published by the Nevada Legislature, and NRS chapters 363B and 363C as published in this library.

Sourcing note: the Nevada Legislature's website blocks automated retrieval, so the constitutional text was obtained from that site by the maintainer rather than fetched, and quoted here as supplied.

The statements about the absence of a composite return, nonresident withholding, and a pass-through entity tax follow from the absence of a Nevada income tax rather than from a separate provision disclaiming them; no Nevada authority establishing any such regime was found.

The entity-level half of this determination rests on legislative inaction rather than a constitutional prohibition, so it should be re-verified each session year. The partner-level half is constitutionally grounded and correspondingly durable.

# Sources

Nev. Const. art. 10, § 1(9) — https://www.leg.state.nv.us/const/nvconst.html

Nevada Department of Taxation, Nevada Tax Notes, Issue No. 194 (January 2023) — https://tax.nv.gov/wp-content/uploads/2024/05/01-2023-Tax-Notes-Issue-194-compressed.pdf

Nevada Department of Taxation, Commerce Tax — https://tax.nv.gov/commerce-tax/

Nevada Department of Taxation, Income Tax in Nevada — https://tax.nv.gov/about-nevada-department-of-taxation/income-tax-in-nevada/

Nev. Rev. Stat. §§ 363C.20, 363C.200, 363B.110, as published in this library.