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Modified Business Tax and Business License Fees

The Modified Business Tax passed by the 2003 Legislature became effective October 1, 2003 and at

the same time the Business Tax was repealed. The MBT is based on the gross wages paid by

employers for each calendar quarter with a deduction for allowable health care expenses paid by

employers on behalf of their employees. Two different tax rates are applied. General businesses pay a

rate of 0.65% effective July 1, 2005 and Financial Institutions pay a rate of 2%.

The Department reports $55,248,700 was collected and distributed to the State general fund for the

quarter ending September 30, 2005 for Modified Business Tax from General Businesses and Financial

Institutions. This represents a 5.03% increase above the same quarter prior year. Businesses reported

$8.7 billion in gross wages and took $594 million in allowable health care deductions for the September

quarter, which represents 6.8% of the gross wages.

The Economic Forum May 2005 forecast for this tax is $247 million for fiscal year 2006. The tax

revenue for the first quarter of fiscal year 2006 is down by 2.64% or $6.5 million.

Business License Fees from newly registered businesses or annual renewals amounted to $5,650,370

for the September 2005 quarter which represents a 70.62% increase above the September 2004

quarter collections. This represents a 3.17% increase or approximately $634 thousand above Economic

Forum projections.

Excise Tax Revenue Collections – September 2005

The Department reports excise tax collections of $108,381,516 for the month of September 2005

increased 13.16% compared to the same month prior year.

Compared to the Economic Forum’s May 2005 projections, fiscal year to date cigarette taxes are .88%

above projections. The liquor tax is 1.81% above projections. September 2005 collections for Live

Entertainment Tax were $532,221, 9.03% below projections for fiscal year to date. The quarter filing for

Bank Excise Tax amounted to $1,464,750, 21.4% above fiscal year projections and for the Real

Property Transfer Tax, $19,360,291 was collected for September, which stands at 11.48% below

Economic Forum projections.

Governor Kenny Guinn’s Comments

“Nevada’s economy continues to thrive. Our business men and women have delivered another

successful month of sales for September. Statewide taxable sales for September 2005 represents a

9.8% increase over September 2004, and a 12% increase for the three months of fiscal year 2006. The

state’s economy is healthy.”

Taxation Revenue Statistics - September 2005 - State Of Nevada Department Of Taxation Page 2