
INSIGHTS FROM OUR NATIONAL TAX OFFICE	AUGUST 9, 2016

Nevada Commerce Tax Extension Requirements

We have received numerous questions from clients regarding compliance with the new Nevada commerce tax. The first Nevada commerce tax return and payment is due on August 15, 2016, for the taxable year beginning July 1, 2015, and ending June 30, 2016. An extension of time to file and to pay may be available upon request.

For an overview of the Nevada commerce tax, click here.

To listen to a recent Nevada commerce tax webinar, click here.

Filing for an Extension

If taxpayers need an extension of time to file and pay their Nevada commerce tax liability, there are a couple of options for this first year. Taxpayers can submit a written request for a 30-day extension. The request can be a letter stating the entity name, Taxpayer Identification Number (obtained from the Department of Taxation), and tax year for which the extension is being requested. The Department of Taxation may not reply to and/or acknowledge the extension request, therefore we recommend including a copy of the request letter with the return. Furthermore, we recommend sending the extension requests via certified mail, return receipt requested, to document timely mailing and receipt by the state of Nevada. The extension extends the time to file and pay. However, interest charges will apply on the 30-day extension.

Also, for only this first year, the Department of Taxation is allowing a six-month grace period for filing the commerce tax return. Penalty and interest are waived for failure to file/pay by February 17, 2017, if the organization can show good cause. The department will consider waivers if the failure to file/pay satisfies both of these conditions:

Occurred despite the person's exercise of ordinary care
Was not intentional or the result of willful neglect

The department has indicated the standard for obtaining a waiver of penalty and interest is "excusable neglect," which generally requires a showing that the taxpayer acted in good faith and had a reasonable basis for its failure to comply with the requirement to file and pay the commerce tax on August 15, 2016. In short, it would be expected that a reasonable person would be working to comply with all applicable statutory and regulatory requirements. The department will grant waiver requests on a case-by-case basis.

Where to Send Requests

The request can be a letter indicating the reasons why the taxpayer cannot file and pay the commerce tax by August 15, 2016.

Extension requests can be faxed to (775) 684-2020 or mailed to:

Nevada Department of Taxation

1550 E College Parkway, Suite 115

Carson City, NV 89706

Penalties

Penalties are assessed based on a graduated schedule adopted by the Nevada Tax Commission. Penalties can range from 2 percent to 10 percent of the tax due depending on the amount of days late, so compliance is important.

Please contact your Eide Bailly professional or a member of our state and local tax team for additional information or questions about the Nevada commerce tax.

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.

855.889.5508

eidebailly.com/tax

NationalTaxOffice@eidebailly.com

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.