Proposed Margin Tax Effect on an Engineering Firm

Posted on by & filed under Nevada by the Numbers Blog.

In prior posts, we looked at the effect the proposed margin tax would have on a variety of actual Nevada businesses. Today we will look at a small engineering firm.

Information is based on actual client data provided to RCG Economics by Las Vegas-based CPA firm Houldsworth, Russo & Company.

Engineering Firm ………………………………………………………………………………………………………………………………………
Revenues as defined (net sales/taxable income) $ 1,506,798
 …
Alternative Margin Calculations
A. 70% of Revenues $1,054,759
B. Cost of Goods Sold
Revenues $1,506,798
Cost of Goods Sold  ($         0)
$1,506,798
C. Compensation
Revenues $1,506,798
Compensation  ($502,256)
$1,004,542
Lesser Taxable Margin $1,004,542
Tax Rate            0.02
Tentative Margin Tax Liability  $    20,091
MBT Offset ($    1,228)
Tax      $  18,863
Tax rate based on company profit ($40,758)                                                            42.28%

*This worksheet does not constitute accounting, tax or legal advice and cannot be used by any taxpayer for the use of avoiding tax penalties imposed under the Internal Revenue Service Code or any other taxing authority. This worksheet provides an estimate only.