A first-year review of the Nevada commerce tax
This edition of Inside Deloitte reviews issues, considerations, and some open questions associated with the Nevada commerce tax, for which the first filings were due August 15 for the period from July 1, 2015, to June 30, 2016. The commerce tax is based on a business entity's gross revenue sourced to Nevada and is assessed at varying tax rates depending on the business entity's primary industry classification.
In June 2015, Nevada enacted its largest tax increase ever, the commerce tax, to bolster K-12 education funding.1 The commerce tax, which became effective July 1, 2015, is imposed on the Nevada gross revenue of each business entity exceeding $4 million in a taxable year at various rates that depend on the industry in which the business entity is primarily engaged.
For purposes of the commerce tax, the taxable year is defined as the 12 months beginning July 1 and ending June 30 of the following year, which coincides with the Nevada fiscal year.2 The first taxable year for the new commerce tax began July 1, 2015, and ended June 30, 2016, and the first commerce tax return was due August 15, with a 30-day extension available. Questions, issues, and taxpayer considerations have arisen during that initial commerce tax taxable year and filing period.
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1 Nev. Rev. Stat. section 363C.200 (2016); and Associated Press, "Nevada Assembly Passes the State's Largest One-Time Tax Increase," The Wall Street Journal, June 1, 2015.
2 Nev. Rev. Stat. section 363C.080 (2016).