Nevada has long been considered a tax haven of sorts due to its business-friendly laws and minimal state-level taxes. All of that may have changed, however, on June 10, 2015, when Nevada Governor Brian Sandoval signed into law Senate Bill No. 483, enacting the state's annual commerce tax.
The commerce tax will be imposed on all business entities (as defined) engaging in a business in the state. For all taxpayers, the taxable year will run from July 1 through June 30 and the first report will be due 45 days after the fiscal year ending June 30, 2016.
The base for calculating the tax is the taxpayer's apportioned Nevada gross receipts, less certain exclusions and deductions, in excess of $4,000,000. The base is then multiplied by the tax rate applicable to the taxpayer's business category, which ranges from 0.051% to 0.331%.
Since the commerce tax is a gross receipts tax and not an income tax, taxpayers may be unpleasantly surprised to find that they are subject to the tax even if they do not operate a business location within the state.
If your company does, or is considering doing, business in Nevada, please contact us to discuss how the commerce tax could affect you and visit the State and Local Tax blog to read more insights from Schneider Downs.