Nevada Legislature Revises Commerce Tax Filing Obligations for Taxpayers Under the Revenue Threshold
On June 3, 2019, Nevada Governor Steve Sisolak signed into law Senate Bill 497, which eliminates the Commerce Tax filing requirement for business entities with nexus in Nevada whose Nevada-source revenue falls below the $4 million taxability threshold. Effective for the state’s fiscal tax year beginning July 1, 2018, through June 30, 2019, such business entities are no longer required to file the Form TXR-030.01, Nevada Commerce Tax Return due 45 days after the end of the fiscal period (generally August 14).
The Nevada Commerce Tax, which became effective July 1, 2015, is imposed on the Nevada gross revenue of each business entity (“taxpayer”) exceeding $4 million in a taxable year (determined on a July 1 – June 30 fiscal year basis) at various rates that depend on the industry in which the taxpayer is primarily engaged. Prior to the enactment of S.B. 497, taxpayers with nexus in Nevada but having less than $4 million of Nevada gross revenue were required to file a Commerce Tax return with a box checked next to the statement: “I declare that the Gross Revenue from engaging in business in Nevada of the above Business Entity did not exceed $4,000,000 during the taxable year.”
Among other minor revisions, Nev. Rev. Stat. § 363C.200(2) added the following provision: “The [Nevada] Department [of Taxation] shall not require a business entity whose Nevada gross revenue for a taxable year is $4,000,000 or less to file a return for that taxable year.”
Please note that, although the filing requirement for taxpayers who do not meet the revenue threshold has been eliminated, the Department’s online form still allows for the filing of a “no tax due” return, should taxpayers below the threshold elect to continue filing. Informal discussions with Department agents indicates that the Department will continue to accept a “no tax due” return, and encourages taxpayers to file such a report if: (1) the taxpayer’s Nevada gross revenue was above the $4 million thresholds in a prior fiscal period but below the threshold in the July 1, 2018 – June 30, 2019 fiscal period; (2) the taxpayer first established nexus with Nevada in the July 1, 2018 – June 30, 2019 fiscal period; or (3) the taxpayer otherwise received a notice from the Department requesting the taxpayer file a Commerce Tax return.
For further information on the Nevada Commerce Tax, including nexus, revenue sourcing, and other issues, please contact any of the following SALT professionals: