Title & Escrow Companies Bookkeeping in Nevada

Escrow and trust account requirements in Nevada are set by state law and by the underwriters you are appointed with, and they typically cover how funds are held, how frequently the account is reconciled, and what records must exist for each file. The reconciliation that satisfies all of them is the three-way: escrow bank balance, escrow book balance, and the sum of the individual file ledgers, agreeing at one point in time. Two of the three will frequently agree while the third does not, which is precisely why the third exists. The entity is registered with the Nevada Secretary of State and, where the company sells anything taxable alongside closings, with the Nevada Department of Taxation as well — no state income tax, but the Commerce Tax applies to businesses above a gross revenue threshold and is easy to overlook. We keep that reconciliation current and documented; whether it meets your specific Nevada obligation is a determination for you, your counsel, and your underwriter.

Nevada levies a real estate transfer or deed tax at closing, which means every file passes tax collected from the parties through your escrow account to a recording authority. It is pass-through in the purest sense — never income, never expense, simply money moving across your ledger — and files that run it through revenue can overstate a title company's income by a multiple. Recording fees and any state or county surcharge behave the same way, and the settlement statement is the source document that has to reconcile to what actually left the account.

Registering to do business in Nevada runs through the Nevada Secretary of State, with tax accounts through the Nevada Department of Taxation and employer accounts through the Nevada Department of Employment, Training and Rehabilitation. Nevada treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

Beyond sales tax, Nevada levies the Commerce Tax on Nevada gross revenue above a substantial annual threshold, payable by the business. the rate is set by NAICS business category, so your classification determines what you pay. Businesses under the threshold are generally excused, but the classification still has to be right. The consequence for your books is direct: the return is annual and driven by a revenue figure for the Nevada activity specifically, which means the books need to isolate Nevada revenue rather than report one national total. It is registered and filed separately from anything the Nevada Secretary of State handles, and it accrues on revenue rather than on profit — so it is recorded as it builds, not discovered at year end.