Nevada has no personal income tax and no corporate income tax. There is no state return that reflects rental income or depreciation, so the federal §168(k) deduction flows through with zero state modification for STR investors regardless of entity type. The Commerce Tax under NRS Ch. 363C applies only to entities with over $4M in Nevada-sourced gross receipts and does not touch depreciation regardless. Compare Nevada to every other jurisdiction in our all-50-states conformity guide.
Modeled on a $150,000 federal §168(k) deduction on a Nevada STR property.
Why Nevada Is the Cleanest No-Tax State for STR Investors
Nevada is one of only two states (with Wyoming and South Dakota) that combines no personal income tax, no corporate income tax, and no franchise/margin tax on ordinary business entities. Article X, §1(9) of the Nevada Constitution prohibits the state from taxing the income of natural persons; the legislature has never enacted a corporate income tax. For STR investors, this means the entire state depreciation question is not just moot — it doesn't exist. There is no return that could reflect a §168(k) deduction.
The federal Year-1 §168(k) write-off you claim on Schedule E is exactly what you keep, and no state-level modification, add-back, subtraction, timing difference, or basis adjustment exists in any dimension. This makes Nevada the highest-value state for STR investors comparing tax jurisdiction alongside high-amenity real estate — particularly the Nevada side of Lake Tahoe versus the California side.
The Nevada Commerce Tax and Modified Business Tax — Why They Don't Affect §168(k)
Nevada has two entity-level taxes worth understanding, but neither interacts with bonus depreciation:
Commerce Tax (NRS Ch. 363C) — a gross-receipts tax imposed only on entities with Nevada-sourced gross receipts exceeding $4 million in a fiscal year. Rates vary by industry classification (0.051% to 0.331%). Individual STR investors and small STR portfolios sit far below the $4M threshold and never owe Commerce Tax. Even for entities above the threshold, the tax is levied on gross receipts, not net income, so depreciation is not part of the calculation.
Modified Business Tax (MBT — NRS Ch. 363A and 363B) — a payroll tax on wages paid to Nevada employees. Individual STR investors and pass-through entities without W-2 employees do not owe MBT. STR operators with employees (in-house property managers, cleaning staff on payroll) owe MBT on wages, but depreciation is not a factor in the calculation.
STR operators also collect and remit the state Transient Lodging Tax and county-level lodging taxes on nightly stays. These are consumption taxes paid by the guest and passed through by the operator; they have no interaction with the depreciation math.
Worked Example — $150,000 Federal Deduction on an Incline Village Lakefront
Assume an STR investor buys a fully-furnished 4-bedroom lakefront home in Incline Village on the Nevada side of Lake Tahoe, closes 2026, and identifies $150,000 in bonus-eligible 5-year and 15-year assets through a photo-analyzed cost-segregation report.
| Line | Federal | Nevada | California side (for contrast) |
|---|---|---|---|
| Year 1 §168(k) deduction | $150,000 | No state return / no depreciation entry | $0 (100% add-back under R&TC §17250.5) |
| Year 1 tax savings @ 37% federal / 0% NV / 13.3% CA | $55,500 saved | $0 NV state tax owed | -$19,950 CA state timing hit |
| Net Year-1 savings | — | $55,500 (federal only) | $35,550 (federal minus CA hit) |
The Nevada-side Incline Village investor comes out $19,950 ahead of an otherwise-identical California-side Tahoe City investor in Year 1 on the same $150,000 bonus deduction. That gap widens across the hold — Nevada continues to impose no state tax on ongoing rental profits, while California taxes them at up to 13.3% every year. Run any Nevada-side Lake Tahoe address to see the combined federal-and-state math on your specific property.
Nevada STR Markets Where Bonus Depreciation Compounds Fastest
The Year-1 write-off is largest where the personal-property share of purchase price is highest. In Nevada that concentrates in Lake Tahoe and the state's higher-end resort corridors:
The Nevada side of Lake Tahoe (Incline Village, Crystal Bay, Zephyr Cove, Stateline, Kingsbury) — this is Nevada's highest-value STR market and one of the most amenity-dense in the West. Purpose-built lakefront and view homes with private docks, boat lifts, wraparound decks, hot tubs, gas fireplaces, chef's kitchens, home theaters, and full FF&E commonly run 32–38% bonus-eligible on purchase price. A $1.4M Incline Village lakefront can produce a Year-1 write-off of $450k–$530k.
Las Vegas STR-permitted properties — the city's licensing regime tightly limits STR properties. Permitted units in Summerlin, Henderson, and Southern Highlands (with private pools, spas, outdoor kitchens) run 28–33% bonus-eligible when fully furnished. Land ratio in central Las Vegas is higher than in Tahoe — modeling matters.
Reno and Sparks — 25–28% on furnished properties. Growing STR market with strong shoulder-season demand from Bay Area weekenders.
Mesquite (SR Golf) — 27–31% on furnished golf-resort homes with pools and mountain views. Steady snowbird demand.
Pahrump and Amargosa Valley (Death Valley overflow) — 26–30% on furnished properties, low land ratios.
Lake Tahoe alone justifies serious modeling attention — the difference between an eyeballed 30% and an itemized 36% bonus-eligible share is $84k–$120k in Year-1 write-off on a $1.4M purchase. This is exactly where DepreciMax's photo-analyzed report earns its keep.
The Statute Explained
Nevada's tax framework has constitutional and statutory-level protections for STR investors that no other state matches simultaneously. Nev. Const. Art. X, §1(9) flatly prohibits any state tax on the income of natural persons. The legislature has never enacted a corporate income tax on ordinary businesses (Nevada's Insurance Premium Tax is a separate excise regime specific to insurers). NRS Ch. 363C (Commerce Tax) and NRS Ch. 363A/B (MBT) impose gross-receipts and payroll taxes respectively at the entity level, both of which sidestep depreciation entirely.
OBBBA (P.L. 119-21) restored 100% federal bonus for property acquired and placed in service after January 19, 2025. For Nevada STR investors the restoration flows through federal at full strength with zero state offset in any dimension — the cleanest possible result.
How Nevada Compares to California and Utah
Nevada's tax posture is materially better for STR investors than any of its neighbors. California decouples from §168(k) at the individual and corporate level with a 13.3% top marginal rate, creating a large Year-1 state add-back Nevada investors avoid. Utah conforms to federal §168(k) at a 4.65% flat rate, which is far better than California but still means Utah investors pay state tax on ongoing rental profits that Nevada investors do not.
Compared to the other no-income-tax states, Nevada is functionally identical for individual STR investors — Florida, Texas, Tennessee (sole prop only), Washington, and Nevada all produce the same result. The advantage of Nevada is the pairing with Lake Tahoe: the Nevada side of Tahoe is one of the highest-value STR markets in the West, and holding property there rather than on the California side is a real dollar difference every year of the hold.
Use the state conformity tool to run Nevada side-by-side with California or any other state at any federal deduction amount and marginal rate.
What This Means for Your Nevada STR Purchase Decision
For an STR investor evaluating an Incline Village lakefront, a Las Vegas STR-permitted pool home, or a Mesquite golf resort property, Nevada's zero-income-tax posture is the strongest possible tax setup. Three takeaways:
First, the federal Year-1 bonus deduction is fully preserved. On a $150,000 federal bonus, a Nevada investor keeps the full $55,500 federal Year-1 savings at 37% and pays nothing to the state of Nevada in income tax or any depreciation-adjusted tax.
Second, entity structure doesn't matter for the depreciation question. Sole proprietor, single-member LLC, multi-member LLC, S-corp, C-corp — all produce the same zero-state-tax result on §168(k). Choose entity structure for asset protection, financing, and estate planning reasons only.
Third, if you're comparing Lake Tahoe purchases across the state line, the Nevada side (Incline Village, Zephyr Cove, Crystal Bay, Stateline) beats the California side (Tahoe City, Tahoma, South Lake Tahoe) by ~$20K in Year-1 tax savings on a typical $150,000 bonus deduction, and continues to beat it every subsequent year on ongoing rental profits.
Before writing an offer on any Nevada STR placed in service after January 19, 2025, run the address to get a line-item breakdown of the actual bonus-eligible share.
Analyze a specific Nevada property
Run any Nevada STR listing through DepreciMax's $99 property report — line-item finish classification closely calibrated to a formal cost seg study, includes state-specific conformity math.
Frequently Asked Questions
Does Nevada conform to federal §168(k) bonus depreciation?
Nevada has no personal income tax under Article X, §1(9) of the Nevada Constitution and no corporate income tax. There is no state return that reflects rental income or depreciation, so the federal §168(k) deduction flows through with zero state modification for STR investors regardless of entity structure.
Does the Nevada Commerce Tax affect my STR bonus depreciation?
Almost never. The Commerce Tax under NRS Ch. 363C applies only to entities with Nevada-sourced gross receipts exceeding $4 million in a fiscal year. Individual STR investors and small portfolios sit well below this threshold. Even for entities above the threshold, the Commerce Tax is calculated on gross receipts, not net income, so depreciation is not part of the calculation.
Does the Nevada Modified Business Tax affect STR investors?
The Modified Business Tax (MBT) under NRS Ch. 363A/B is a payroll tax on wages paid to Nevada employees. Individual STR investors and pass-through entities without W-2 employees do not owe MBT. STR operators with employees (property managers, cleaning staff on payroll) may owe MBT on wages, but depreciation is not a factor in the MBT calculation.
How does Nevada compare to California for STR investors evaluating Lake Tahoe properties?
On a Lake Tahoe purchase, the Nevada side (Incline Village, Zephyr Cove, Crystal Bay, Stateline) beats the California side (Tahoma, Tahoe City, South Lake Tahoe) meaningfully on tax. Nevada preserves the federal §168(k) deduction in full with no state offset. California decouples from §168(k) with a top marginal rate of 13.3%, creating a Year-1 state add-back of ~$19,950 on a $150,000 bonus deduction that Nevada investors avoid. The California side also continues to tax ongoing rental profits at up to 13.3% every subsequent year.
Which Nevada STR markets benefit most from the 100% bonus restored under OBBBA?
The Nevada side of Lake Tahoe — Incline Village, Crystal Bay, Zephyr Cove, and the Stateline corridor — is the highest-value STR market in the state. Purpose-built lakefront and view homes with hot tubs, private docks, boat lifts, wraparound decks, and full FF&E run 32–38% bonus-eligible on purchase price. Las Vegas STR-permitted properties run 26–30%. Reno and Sparks run 25–28% on furnished properties.
What's the Year-1 write-off on a $1.4M Incline Village lakefront under OBBBA?
Expect a Year-1 write-off of approximately $450,000 to $530,000 on a fully-furnished Incline Village lakefront at $1.4M purchase price, assuming a 32–38% bonus-eligible share typical of high-amenity Lake Tahoe properties. At a 37% federal marginal rate that is $167,000 to $196,000 in Year-1 cash tax savings for a Real Estate Professional or Materially Participating STR investor — with zero Nevada state offset.
Do I need to file anything with Nevada for my STR bonus depreciation?
No income-tax return is required (Nevada has none). STR operators must register with the Nevada Department of Taxation, file the state Transient Lodging Tax and applicable county lodging taxes on nightly stays, and register any employees for Modified Business Tax if applicable. None of these filings involve depreciation.
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
See the 50-state map →Nevada authority: Nev. Const. Art. X, §1(9) (prohibiting state tax on the income of natural persons); NRS Ch. 363C (Commerce Tax, $4M gross-receipts threshold); NRS Ch. 363A/363B (Modified Business Tax on payroll); NAC Ch. 363C (Commerce Tax regulations); Nevada Department of Taxation guidance (tax.nv.gov). Federal authority: IRC §168(k), as amended by the One Big Beautiful Bill Act (P.L. 119-21) restoring 100% bonus depreciation for property acquired and placed in service after January 19, 2025. Nothing in this article is tax advice. Consult a CPA who specializes in real estate before making investment decisions based on state-conformity projections.