During its 2015 Session, the Nevada Legislature enacted tax legislation in Senate Bill 483 (“SB 483”) that essentially impacts all entities doing business in Nevada. Effective July 1, 2015, SB 483 imposes an annual commerce tax on all business entities1 with Nevada-based gross revenue exceeding $4 million in a taxable year. Further, SB 483 mandates that all Nevada business entities and “any other person engaged in a business” must now file Commerce Tax Returns with the Nevada Department of Taxation (the “Department”), though only those with more than $4 million in annual Nevada gross revenue will be required to pay the commerce tax.
The first Commerce Tax Returns are due on August 15, 2016 for Nevada gross revenue received by a business entity during the four calendar quarters beginning July 1, 2015 and ending June 30, 2016.
If a Nevada business entity's resulting Nevada gross revenue exceeds $4 million, the excess Nevada gross revenue is subject to tax at various rates that depend upon the industry in which the business entity is “primarily engaged.” For this purpose, a business entity would be treated as “primarily engaged” in the business category in which the highest percentage of its Nevada gross revenue is generated. The tax rates range from 0.051 to 0.331 percent for 26 different business classifications pulled from the North American Industry Classification System (“NAICS”).
Each Nevada business entity must designate on its initial Commerce Tax Return the applicable NAICS business classification in which it is primarily engaged. Once the designation has been made on the initial Commerce Tax Return, it may not be changed unless the business applies to the Department to change the designation and the Department determines that the business is no longer primarily engaged in the designated business classification.
While the Department may have already provided prior drafts of the Commerce Tax Return to certain Nevada businesses, the most recent (and substantially revised) version of the Commerce Tax Return, along with necessary filing instructions, are available on the Department’s website at: http://tax.nv.gov/Commerce/ComTax_Return_Filing/.