SALT Report 3005 – The Nevada Department of Taxation issued guidance regarding the exemption from sales and use tax for governmental agencies pursuant to NRS 372.325. Under that statute, sales and purchases of tangible personal property to the following groups are exempt:
- The United States, and its unincorporated agencies and instrumentalities
- The State of Nevada, and its unincorporated agencies and instrumentalities
- Any county, city, or district of Nevada, and
- Other political subdivisions of the state
These governmental agencies are not required to obtain an exemption letter from the Department of Taxation. However, to make an exempt purchase, the agency must purchase the items with a government issued credit card, purchase order, or check and the sale must be a direct sale to the government. To document the exemption, vendors should keep a copy of the government issued credit card along with the purchase order in their records.
The exemption for government agencies does not apply to personal purchases made by employees of the government. For example, an employee who buys lunch with a government issued credit card does not qualify for the exemption. Additionally, the exemption does not apply to the room / lodging tax as these taxes are administered by individual counties. Lastly, the exemption does not apply to other state governments, only Nevada.
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