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August 3, 2020
2020-1956

Nevada Commerce Tax due August 14, 2020

The Nevada Commerce Tax return is due 45 days following the end of Nevada's fiscal year, which ended on June 30, 2020. This year, the return is due August 14, 2020. The Commerce Tax is based on a taxpayer's Nevada gross receipts over $4 million, earned from July 1, 2019 through June 30, 2020. Businesses with less than $4 million of Nevada gross receipts are not required to file a return.

The Commerce Tax is a tax on Nevada-sitused gross receipts. The tax rate varies, depending on the type or classification of earned business revenue. (The rates by industry sector are set forth in Nev. Rev. Stat. Sections 363C.300 to 363C.560.)

For purposes of the statute, a business's Commerce Tax classification is based on its North American Industry Classification System (NAICS) code. Once a taxpayer has selected a classification on its initial return, it must petition the Nevada Department of Revenue to change it on future returns.

Unlike other states (e.g., Ohio with its commercial activity tax), Nevada does not permit consolidated or combined filing by related businesses for Commerce Tax purposes. Even single-member limited liability companies that are engaged in business in Nevada and disregarded for US federal income tax purposes must separately file a return based on their activity in Nevada.

Despite the lack of a combined or consolidated filing, the Nevada Commerce Tax allows taxpayers to avoid double taxation of certain related party transactions. For example, "pass-through revenue," as defined by the statute (Nev. Rev. Stat. Section 363.070), is not subject to Nevada Commerce Tax. Specifically, payments between affiliated entities, defined as entities with 50% or more common direct or indirect ownership, constitute "pass-through revenue" that is not subject to Nevada Commerce Tax (see Nev. Rev. Stat. Section 363C.070(1)(f)). Likewise, receipts by partners or members in pass-through entities that may have had a separate Nevada filing obligation are not subject to Nevada Commerce Tax (see Nev. Rev. Stat. Section 363C.070(1)(a)).

Implications

Taxpayers that fail to timely file their return and pay tax due may be subject to penalties and interest. Taxpayers that need additional time to file the return and pay the tax due can apply for a 30-day extension before the Commerce Tax payment due date.

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Contact Information
For additional information concerning this Alert, please contact:
 
State and Local Taxation Group
   • Allan Holzer (allan.holzer@ey.com)
   • David Han (david.han1@ey.com)
 

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