Nevada Contractor License Exam — All Questions
2 questions
Which statement about Nevada state taxes affecting a contracting business is correct?
- a.Nevada imposes a personal income tax but no corporate income tax
- b.Nevada imposes a 9% corporate income tax on all profits
- c.Nevada imposes neither a personal nor a corporate income tax, but does levy a Modified Business Tax (a payroll tax) on wages✓
- d.Nevada imposes a flat 5% personal income tax
Nevada has no personal or corporate income tax. It does impose a Modified Business Tax on wages (a payroll-based tax) and a Commerce Tax on large gross revenues, so a contractor still has state tax obligations to plan for.NRS Chapter 363B (Modified Business Tax); Nevada has no state income tax
Separate from what is withheld from the worker, how much FICA (Social Security plus Medicare) must a Nevada employer pay as its own matching share on $3,000 of wages that are below the Social Security wage base?
- a.$229.50✓
- b.$186.00
- c.$459.00
- d.$90.00
The employer matches the employee's FICA dollar for dollar: 6.2% Social Security + 1.45% Medicare = 7.65%. 7.65% x $3,000 = $229.50. The employee pays another $229.50, for 15.3% combined.IRS Circular E, Pub. 15 (FICA: 6.2% Social Security + 1.45% Medicare employer match)