What to Know About Tax Abatements for Businesses in Nevada and Nationwide

You may be familiar with tax incentives states use to attract major investments, from filmmaking to corporate relocations. Many states, including Nevada, also offer incentives that apply to businesses of all sizes.

Understanding these incentives can materially improve the economics of growth decisions. In Nevada, the Governor’s Office of Economic Development (GOED) offers statewide tax abatements to free up cash flow and make business investment more attainable.

What State Tax Abatements Does Nevada Offer Businesses?

Nevada offers a mix of general and specialized tax abatements to support business formation and long-term investment. Other states offer similar incentives, although their structure and eligibility vary.

Nevada’s statewide tax abatements include:

• Standard tax abatements covering sales and use tax, personal property, and modified business taxes
• Data center abatements
• Aviation abatements
• Abatements tied to large-scale recycling investments of $1 billion and $3.5 billion
• Real property abatement for recycling businesses

If you are planning a significant capital investment in Nevada, these abatements are worth exploring. With the right guidance from a business-oriented bank and support from Nevada’s regional economic development organizations, the process does not have to be burdensome.

This article highlights two key Nevada tax abatements: standard tax abatements and the real property recycling tax abatement.

Standard Abatements Tied to Qualified Capital Equipment Purchases

Nevada’s standard tax abatements apply broadly to businesses expanding in the state through qualified capital equipment purchases. These are most practical for companies making sizable capital investments.

The standard tax abatement provides two key benefits:

• A 50% modified business tax (MBT) abatement on quarterly wages over $50,000
• A 50% personal property tax abatement for up to 10 years

This type of abatement can make a capital investment more attractive and help tip the decision toward moving forward with expansion or equipment upgrades.

Nevada’s Real Property Recycling Abatement

The real property recycling abatement applies to businesses engaged in manufacturing, fabrication or raw materials processing. Qualifying businesses may receive a real property tax abatement of up to 50% for up to 10 years.

To qualify, at least 50% of the company’s materials or products must be recycled on-site. This abatement may apply to recycling-focused manufacturers, materials processing companies or industrial operations involving metals, auto parts or similar inputs.

The recycling abatement reflects Nevada’s support for advanced manufacturing and circular economy practices. It also highlights that Nevada’s abatements are not one-size-fits-all and can align with specific business models.

Making Tax Abatement Easier: How Economic Development Groups Can Help

Navigating state incentives can be daunting, but the GOED works with regional partners to help businesses manage the process. These partners are known as regional development authorities (RDAs). Companies in Clark County, in Southern Nevada, turn to the Las Vegas Global Economic Alliance. In the Reno region, the Economic Development Authority of Western Nevada (EDAWN) and its “Business Builders” team support applicants.  

Companies apply for tax abatements through their RDA. Most RDAs offer personalized, hands-on support throughout the application process, including services like EDAWN’s Business Builders. This support typically includes:

• Eligibility pre-screening: RDAs often evaluate data like capital investment, job creation and wage rates before the application is submitted to the GOED.
• Advocacy at GOED Board meetings: The regional RDA representative often speaks on behalf of the company to explain why the project is vital for that specific community.
• Data-driven Support: EDAWN and the LVGEA offer a “City Check” tool that calculates potential savings and compares operating costs.

After approval, companies enter into a performance-based legal contract. To keep the incentives, the business must maintain its Nevada operations for at least five years. If a business fails to meet its commitments, the state can “claw back” the abated taxes plus interest.

How Western Alliance Bank Can Help Choose the Right Financing Programs

When evaluating equipment purchases or capital improvements that may qualify for tax abatement, many companies also need business financing support. Experienced business bankers like the team at Western Alliance Bank, with its deep roots in the Nevada marketplace, can help. As a trusted advisor, your Western Alliance relationship banker can work with your company to:

• Assess your eligibility for a wide range of financing programs
• Navigate program requirements and timelines
• Identify the most effective solutions to support growth today and in the years ahead
• Leverage available opportunities to strengthen your business position

Ready to get started? Contact the experienced business banking team at Western Alliance to explore financing structures that will help your company invest confidently and support long-term growth.