Cash register and Z report: how to reconcile your sales with sales tax

What the Z report is (and how it differs from the X report)

Almost every cash register and point-of-sale system has two readings:

• X report: a partial reading. It shows how the day is going without closing anything. You can run it as many times as you want.
• Z report: the closeout. It summarizes the whole day and resets the totals to zero to start the next one. You run it once, at the end of the day.

In Square, Clover or Toast it isn't called a “Z,” but a daily sales summary or closeout, and it serves the same purpose. What matters is that every day has its closeout and that you keep it.

Why the law makes it your proof

Nevada law requires every business to keep records of its sales:

“Every seller, every retailer, and every person storing, using or otherwise consuming in this State tangible personal property purchased from a retailer shall keep records, receipts, invoices and other pertinent papers in such form as the Department may require.”

— NRS 372.735

Those records are kept for at least 4 years, or 8 if you did not file returns (NRS 372.735). And each period's return must show your gross receipts for that period (NRS 372.365). The Z report is exactly that: your sales for the day, with every payment method.

In addition, every customer you charge tax to must receive a receipt with your name and address, the date, the price and the tax collected (NAC 372.770). Your register's receipt already does this, as long as it is programmed correctly.

The lines of the Z report and what to do with each one

Each brand names them differently, but almost every report has these lines:

Report line	What it is	What to do for the return
Gross sales	Everything you rang up, before discounts and returns	This is the starting point. Check whether your register shows it with or without the tax.
Discounts	Price reductions you applied at checkout	If you lowered the price when you sold, the sale is worth what you collected. The law also excludes from gross receipts “cash discounts allowed and taken” (NRS 372.025, subsection 3).
Returns and refunds	Money you gave back to customers	Subtract them if you refunded the full price, in cash or in credit. Don't subtract them if, to give the refund, you required the customer to buy something else at a higher price (NRS 372.025).
Voids	Sales rung up and canceled	A sale voided before payment is not a sale. Write down the reason for each void, so you can explain it if you are asked.
Tax collected	The sales tax the register added to the receipts	It isn't your sale: it is subtracted from gross receipts, as long as it is clear that you added it to the price and didn't absorb it yourself (NRS 372.025, subsection 4). Use it to check that you charged correctly (see below).
Exempt or non-taxable sales	Items flagged as non-taxable	The return asks for your total gross receipts (NRS 372.365), and the Department's form has its own line to subtract exempt sales. Check that they really are exempt.
Tips	What the customer added voluntarily	Keep them separate from sales so they don't get mixed in. If your business charges a mandatory service charge, that's a different matter: the law includes in the price the services that are part of the sale (NRS 372.025, subsection 2), so check how it is treated before subtracting it.
Payment methods	Cash, card, Zelle and others	They don't change the tax: they all count the same. They are used to reconcile the register with the bank.

The math, step by step

An example with made-up numbers: a Las Vegas store adds up its Z reports for one month.

Item	Amount
Gross sales for the month, without tax	$12,400.00
− Discounts applied at checkout	−$400.00
− Returns with a full refund	−$300.00
Gross receipts to report	$11,700.00
− Exempt sales	−$1,200.00
Taxable sales	$10,500.00
Tax due (8.375% in Clark County)	$879.38
Tax shown on the sum of the Z reports	$885.10
Difference to review	$5.72

That last line is the one almost nobody looks at, and it's the one that tells you whether your register is programmed correctly. A few cents can be legitimate rounding (we explain it below); a difference that repeats and grows every month means you should check the register's rate.

Check that your register charges the correct tax

A one-minute test: ring up a $10.00 sale. In Clark County the tax should come out to $0.84 (8.375% of $10 is $0.8375, and the law requires rounding up to the next cent when the third decimal place is greater than 4, NRS 360.299). If you get a different figure, your register's rate is wrong.

Small differences of a few cents over the month are normal: the law allows the tax to be calculated item by item or on the receipt total (NRS 360.299), and each method rounds differently. A difference that grows every month isn't rounding: it's a misprogrammed rate.

• If you undercollected, the tax is still calculated on your taxable sales: you pay the difference, because the tax is imposed on the business (NRS 372.105).
• If you overcollected, that money isn't yours. Under the rule, an over-collection is anything above the tax calculated under NRS 360.299, and also tax you collected on an exempt sale (NAC 372.765). This is what it requires:

“1. Any over-collection must, if possible, be refunded by the retailer to the person from whom it was collected. […] 3. A retailer shall: (a) Use all practical methods to determine the amount to be refunded pursuant to subsection 1 and the name and address of the person to whom the refund is to be made. […] 4. Any over-collection that cannot be refunded for any reason must be paid to the Department.”

— NAC 372.765

First you try to refund it by every practical means: for example, to customers who paid by card or whom you have on record. Whatever can't be refunded is paid to the Department of Taxation. And most important: fix the register's rate so it doesn't keep happening.

Reconcile the Z report with the bank

The sum of the payment methods on the Z report is what you collected: sales, plus tax, plus tips. The bank almost never shows the same amount, and that's fine if you know why:

• Card sales arrive net. The processor deposits the sale minus its fee, but you report the full price.
• Cash isn't always deposited. Cash you use for change, to pay a supplier or that you take out is still a sale.
• Deposits arrive days later. Friday's sales may come in on Tuesday.

If you want the details on why the bank isn't the basis for the tax, see guide 1: gross receipts, not deposits.

The most common mistakes

If your register was never programmed correctly

The first step is knowing how long it has been that way and in which direction: whether you undercollected or overcollected. With saved Z reports it can be reconstructed month by month. The options the law gives you to correct past periods are explained in guide 1.

At Rumbo Estrategico we review and program your cash register with the correct rate (from $149, the final price after we see your register) and help you carry the Z report into your books and your return. If your case ends up requiring formal representation before the State auditor, we connect you with someone who can provide it.

Frequently asked questions

What is a cash register Z report?

It is the end-of-day closeout: it summarizes all sales, discounts, returns, tax collected and payment methods, and resets the totals to zero for the next day. The X report, by contrast, is a partial reading that doesn't close anything.

How long do I have to keep Z reports in Nevada?

At least 4 years if you file your returns, and 8 if you did not file them (NRS 372.735).

Is the tax shown on the Z report what I have to pay?

Not necessarily. What you owe is your county's rate on your taxable sales, calculated per receipt or per item under NRS 360.299. The tax on the Z is used to check that your register charges correctly: if you undercollected, you pay the difference; if you overcollected, it is refunded to the customer and, if that isn't possible, paid to the Department (NAC 372.765).

What do I do if my register overcollected tax?

You must try to refund it to customers by every practical means. Whatever can't be refunded is paid to the Department of Taxation (NAC 372.765). And the register's rate has to be corrected.

Are returns subtracted from sales?

Yes, when you refunded the full price in cash or in credit. They are not subtracted if, to give the refund, you required the customer to buy something else at a higher price (NRS 372.025).

How do I know if my register has the correct Las Vegas rate?

Ring up a $10.00 sale: the tax should come out to $0.84, which is Clark County's 8.375% rounded to the cent under NRS 360.299. If you get a different figure, it needs to be reprogrammed.

Sources

✓ Legal basis verified

NRS 372.735 (records and retention periods), NRS 372.365 (contents of the return), NRS 372.025 (gross receipts: discounts, returns and tax), NRS 372.105 (the tax is imposed on the retailer), NRS 360.299 (calculation and rounding of the tax), NAC 372.760 (tax included in the price), NAC 372.765 (over-collection) and NAC 372.770 (customer receipt). Texts read at leg.state.nv.us on September 30, 2026. Clark County rate: tax.nv.gov. The amounts in the example are made up.

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