The first return for the Nevada Commerce Tax (NCT) enacted in 2015 is due on August 15, 2016. The first return will cover the period from its first effective date of July 1, 2015 through June 30, 2016. Unlike business taxes imposed by other states, the NCT is calculated based on Nevada's fiscal year, July 1 — June 30, not the taxpayer's tax year. The NCT is imposed on business entities with Nevada gross revenue exceeding $4 million. Even if a business entity does not have annual revenues that exceed this gross revenue threshold and thus, no NCT liability but has physical presence in Nevada, according to directions from the Nevada Department of Taxation (Department), it is still required to file a NCT return.

The Department has released the NCT return form, instructions, and updated frequently asked questions (FAQs) (copies of which can be obtained through the link below). Returns can be paper filed or filed electronically.

Taxpayers may not have final gross revenue data by the filing deadline. As such, the state permits taxpayers to rely on the prior-year federal income tax return to estimate the gross receipts for the fiscal year. If relying on prior year data, the NCT return requires filers to disclose by checking the "estimates used" box on the tax form. The taxpayer must also file an amended return once the final amounts are available.

Recognizing the novelty of the new Nevada business tax system, for 2016 only, the Department will allow taxpayers that cannot reasonably comply by the due date to petition for a waiver of penalty if the return is filed prior to February 15, 2017. To qualify, however, the taxpayer must submit a waiver request representing that it made a good faith effort to comply by the deadline and did not willfully neglect its filing obligation. These waiver requests will be reviewed on a case-by-case basis.

Registration

Business entities that are registered for the Nevada Modified Business Tax (MBT) should have received a notification to file a NCT return. Companies that are not registered should complete the NCT nexus questionnaire to determine if registration is required. The questionnaire can be found on the Department's website.

Once a company registers on the Department's website, it will be issued a Tax ID Number, which is needed to file the NCT return.

Commerce Tax Credit

The NCT is a corollary to the MBT, not a substitute. The regulations, however, provide for a credit against a company's MBT liability equal to up to 50% of the NCT paid. Please note that new MBT forms have been released to allow taxpayers to reflect the credit on the MBT return. Preparers of the NCT form should communicate with those responsible for preparing the MBT forms to ensure proper reporting of the NCT credit.

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