Nevada will soon be joining the many states that tax business receipts with the new Nevada Commerce tax (see the Henry & Horne blog “No Longer Tax Free – Nevada Enacts Commerce Tax on Businesses“). The initial Nevada Commerce Tax applies to the fiscal year of July 1, 2015 to June 30, 2016 regardless of the fiscal year of the taxpayer.
To help businesses prepare for the coming tax, the Nevada Department of Revenue has issued a series of FAQ’s – FAQs for Nevada Commerce Tax. Some of the highlights include:
Q: What is the taxable fiscal year of the Commerce Tax?
A: The taxable fiscal year is the 12 month period beginning July 1st and ending on June 30th.
Q: What should I do if my business uses a different taxable year for reporting its revenue for federal tax purposes?
A: A business would use its internal records kept on a monthly basis to calculate and report its Nevada gross revenue from July 1st thru June 30th each year.
Q: When is the tax due?
A: The tax return and payment are due on or before the 45th day following the last day of the taxable year (June 30th). The first return and payment are due on August 15, 2016.
Q: How do I know if I qualify as a “business” subject to the Commerce Tax?
A: A Business is defined as any activity engaged in or caused to be engaged in with the object of gain, benefit or advantage, either direct or indirect, to any person or governmental entity. (Section 3 of Senate Bill 483).
A “business entity” means a corporation, S corporation, partnership, proprietorship, limited- liability company, business association, joint venture, limited-liability partnership, business trust, professional association, joint stock company, holding company and any other person engaged in a business. (Section 4 of Senate Bill 483)
Q: How do I determine my Nevada gross revenue?
A: Nevada gross revenue includes the amounts of revenue received as follows:
- For revenue related to the sale, lease, or royalties of tangible personal property sold to a consumer who is located in Nevada whether it is shipped, delivered into Nevada or purchased at a physical location in Nevada.
- For revenue related to the sale of services, it is the location where the benefit is received by the purchaser. The purchaser is located in Nevada or the service is provided by a Nevada business for a benefit in Nevada.
- For transportation services, it is whether the transport both begins and ends at points located in Nevada.
- For real property sales, rents or royalties if the real property is located in Nevada.
Follow the link above for additional Nevada FAQ’s related to the new Commerce Tax.
By Melinda Nelson, CPA