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Nevada Issues Commerce Tax Regulations

Nevada Issues Commerce Tax Regulations Defining “Engaging in Business” and “Intangible Investments,” Situs of Gross Receipts, Reporting Requirements and Other Provisions

Summary

Effective June 28, 2016, Nevada adopts regulations to accompany the Commerce Tax that was enacted in June 2015, and which applies to taxable years beginning on or after July 1, 2015. The regulations address the definitions of “engaging in business” and “intangible investments,” reporting requirements (including for an entity that falls under the four million dollars Nevada gross revenue threshold), the situs of gross receipts, the method for determining business category, the Payroll Tax credit, and a penalty waiver in the event the taxpayer relied on its most recent federal income tax or Commerce Tax return.

Details

Background

Starting with the taxable period beginning July 1, 2015, Nevada imposes the Commerce Tax measured by the Nevada gross revenue of a business entity engaging in business in the state if the entity has Nevada gross revenue in excess of four million dollars during a taxable year. Nevada gross revenue is generally defined as gross revenue (as adjusted for various deductions) sitused to the state. The rate of tax, which ranges from 0.051 percent to 0.331 percent, depends on the designated business category. A taxable year for all purposes is a 12-month period beginning on July 1 and ending on June 30, and returns and payments are due 45 days after year end (excluding an extension).

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