
INSIGHTS FROM OUR NATIONAL TAX OFFICE	JUNE 24, 2016

Nevada Commerce Tax Update

The State of Nevada, via Senate Bill 483, enacted a new gross receipts tax, called the commerce tax. The first commerce tax return and payment will be due on August 14, 2016, for the taxable year beginning July 1, 2015 and ending June 30, 2016. A 30-day extension may be available upon request. The accounting year on which the commerce tax is based corresponds to the state's fiscal year and is the same for all taxpayers regardless of their own tax year.

Who Is Affected

The annual tax applies to entities that are engaged in business in Nevada and have Nevada-sourced gross revenue that exceeds $4 million in the fiscal year. Business entities include the following: partnerships, limited liability companies, limited liability partnerships, C corporations, S corporations, trusts, and individual taxpayers engaged in business and filing a Schedule C with Form 1040 on their income tax return.

Tax Rates

There are 26 commerce tax rates (ranging from 0.051 percent to 0.331 percent), each consisting of one or more principal industry classifications as delineated by a taxpayer's NAICS classification. Businesses which do not fit into any of the prescribed categories are taxed at the 0.128 percent rate for unclassified businesses.

Defining Revenue

"Gross revenue" is generally defined as the total amount realized by a business entity from engaging in a business in Nevada, without deduction for the cost of goods sold or other expenses incurred. However, the law allows certain exclusions and deductions when calculating the Nevada gross receipts amount. In addition, there are revenue sourcing provisions which resemble the general market sourcing rules for services used by other jurisdictions in the context of state income tax apportionment.

The law requires taxpayers who are engaged in business in Nevada to file a commerce tax return regardless of the amount of their taxable gross receipts. However, taxpayer's having less than $4 million of Nevada gross receipts can simply check a box on the return indicating they are below the $4 million threshold and send in the return. Taxpayers having more than $4 million of Nevada gross receipts must calculate their commerce tax liability.

Learn More

Eide Bailly will be holding webinars about the Nevada commerce tax on July 19 and July 22, as well as an onsite session in Reno on July 21. Visit our events page for more information. You can also learn more by contacting your Eide Bailly professional or a member of our state and local tax team.

Eide Bailly's National Tax Office serves as a resource for clients to help analyze complex tax issues related to business decisions. Our professionals are committed to helping clients stay informed about tax news, developments and trends through various specialty areas, including cost segregation studies, wealth transfer, state and local taxation, international tax, IRS controversy and procedures, R&D tax incentives, tax-exempt organizations, tax legislation, accounting methods and pass-through entities.

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This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Eide Bailly LLP and the author do not assume responsibility for any individual's reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique before recommending the technique to a client or implementing it on the client's behalf. To request reprints of this publication, send a written request to RequestReprints@eidebailly.com. © 2016 Eide Bailly LLP.