Department of Taxation
2003 Nevada Legislature Tax Changes

Overview: Welcome to the Department of Taxation. The Taxpayer Information Packet is provided for your Use and convenience. The Department wishes to make your tax collection and payment as easy as possible. The Packet includes current Nevada Tax information and how it may affect your business. Information on Sales/Use Tax, State Business License, Modified Business Tax and Use Tax as well as sample copies of forms for paying taxes, instructions, (forms with instructions can be found at ‘Common Forms’ tab to the left), tax rates by county, Taxpayer Bill of Rights, and a Resale Certificate are provided.

Overview: Effective 7/20/03, all businesses doing business in Nevada must obtain a State Business License as approved by the 20th Special Session of the Nevada Legislature, per NRS 360.780. Exceptions include small sole proprietors working out of their home and netting less than the average annual wage ($25,400 for 2008), landlords renting 4 or fewer dwellings units, the movie industry, and non-profit organizations.
 
 Who is Affected: All current Businesses and certain individuals who are required to file a Schedule C, E or F with their annual 1040 federal tax returns.

Business License Fee: Pursuant to SB 429, the State Business License Fee and renewal will increase from $100.00 to $200.00 per business effective July 1, 2009, and revert back to $100 effective July 1, 2011.  AB146 makes changes to the administration of the State Business License. Effective October 1, 2009, administration of the State Business License will transfer over to the Secretary of State’s Office. Additionally, the definition of “Business” has language that includes any entity organized pursuant to Title 7 whether or not the entity performs a service or engages in a business for profit. Additional information regarding this change will be sent to taxpayers before October 1st.
AB 37 allows for the waiver of the $100 late payment penalty on Businesses License fees if the late payment is the result of circumstances beyond the taxpayer’s control and occurred despite the exercise of ordinary care and without intent. This bill became effective May 6, 2009

Overview: Effective 10/01/03, every employer who is subject to Nevada Unemployment Compensation Law (NRS 612) is subject to pay the Modified Business Tax (NRS 363B) on total gross wages less a deduction for employee health care benefits paid by the employer. Total gross wages are the total amount of all gross wages and reported tips paid for a calendar quarter (same amount as reported on Line 3 of ESD Form NUCS 4072.) Exceptions to this are employers of exempt organizations and non business employers with household employees only. The rate for general businesses before July 1, 2009 was 0.63%.Effective July 1, 2009 SB429 changes the tax rate for general business employers and creates a tiered system.  If the sum of all taxable wages, after health care deductions, paid by the employer does not exceed $62,500 for the calendar quarter, the amount of tax is 0.5% of the sum of those wages (0.005).  If the sum of all the wages paid by the employer exceeds $62,500 for the calendar quarter, the tax is $312.50 plus 1.17% of the amount the wage exceeds $62,500.  For example:  if the sum of all wages for the 12/09 quarter is $101,000.  The tax is $312.50 plus $450.45 (0.0117 x $38,500 which is the amount exceeding $62,500) = total tax due of $762.95

 Who is Affected: All current General Business Employers.

Overview: Effective 10/01/03, every financial institution employer who is subject to Nevada Unemployment Compensation Law (NRS 612) shall be subject to pay the excise tax on wages as approved by the 20th Special Session of the Nevada Legislature, in SB8 (NRS 363A). The tax is on total gross wages less a qualified deduction for employee health insurance benefits paid by the employer. Total gross wages are the total amount of all gross wages and reported tips paid for a calendar quarter (same amount as reported on Line 3 of ESD Form NUCS 4072.) For Financial institutions the rate is 2%. Financial institutions include all banks, lending institutions, credit card companies, investment companies and exclude federal credit unions.

 Who is Affected: All current Financial Institution Employers.

Overview: Effective 1/1/04, a live entertainment tax has been approved by the 20th Special Session of the Nevada Legislature (NRS 368A). This tax is being administered by two State agencies, the Gaming Control Board for live entertainment events taking place within licensed gaming establishments; and the Department of Taxation for live entertainment events taking place outside of licensed gaming establishments. The live entertainment tax rate is two tiered. A 5% tax rate on events at facilities with 7500 or more seating capacity for admission charges only, and 10% tax rate for events at facilities with minimum seating capacity of 300 up to 7500 on admission charges, food, beverage and merchandise sold. Effective 7/1/05, the minimum occupancy drops from 300 to 200.

 Who is Affected: All Taxpayers.

Overview: The Real Property Transfer Tax (RPTT) is a tax collected when an interest in real property is conveyed (NRS 375). It is collected by the County Recorder at the time of recording. A Declaration of Value form is required to be completed so the tax can be calculated. The rate varies among counties. In 2003, the legislature added $1.30 per $500 of value to the rate levied on the transfer of real property for use by the State of Nevada, in addition to the rates already established for local revenues. The basis for the tax is the actual selling price or the estimated market value of the property. The Department of Assessment Standards (DOAS) oversees the collection process including determination of exempt transactions; and audits the records of the county recorders.

 Who is Affected: All parties who participate in transactions involving the transfer of real property.

Overview: NRS 364A was enacted July 1, 1991 and required a business to apply for a State business license and pay tax based on the number of employees it had working in Nevada or entering Nevada to work or conduct a business activity. Exempt from this tax and licensing requirement were sole proprietors with no employees, non-profit 501(c) corporations and governmental entities. NRS 364A was repealed effective October 1, 2003, however, its repeal does not alleviate a business of its tax obligation for the periods that it was in effect.

 Who is Affected: All Non-exempt businesses and employers.

NOTE: Motor Vehicle Fuel Taxes are now administered by the Nevada Department of Motor Vehicles.