Nevada's new Commerce Tax

You may have recently received a “Welcome Letter” from the Nevada Department of Taxation notifying you of the newly enacted Commerce Tax laws.

The Commerce Tax is a new tax levied annually on each business entity that (1) does business in Nevada, and (2) earned gross revenue in Nevada for the fiscal year that exceeds $4,000,000. However, even exempt entities or business entities whose gross revenues in a fiscal year do not exceed $4,000,000, will be required to take certain actions before the August 15th deadline.

Exempt entities must file the Exempt Status Entity Form using the Tax ID number provided in the Welcome Letter. You can submit the Exempt Status Entity Form to the Department of Taxation by mail or through the Nevada Tax Center system. After submitting the Exempt Status Entity Form, your exempt entity will be in compliance with the Commerce Tax laws and will be removed from further Commerce Tax related mailings.

The list of entities exempt from the Commerce Tax is limited to:

 Natural person, unless such person is engaged in a business and files Schedule C, E (Part 1) or F with the federal tax return;
 Governmental entity
 Non-profit organization pursuant to section 501(c) of the Internal Revenue Code;
 Business entity organized pursuant to NRS 82 or NRS 84;
 Credit union
 Grantor trust, excluding a trust taxable as a business entity for federal tax purposes;
 Estate of a natural person, excluding an estate taxable as a business entity for federal tax purposes;
 Certain REITs – Real Estate Investment Trusts
 REMIC – Real Estate Mortgage Investment Conduit
 Passive Entity*
 Entity, which only owns and manages intangible investments, such as stocks, bonds, patents, trademarks
 Participant in an exhibition NOT required to obtain state business license (NRS 360.780)
 Any person or entity which is prohibited from taxing pursuant to Constitution or law

Our office has been assisting many of our clients with this newly adopted Commerce Tax. If you have questions regarding how to file, or if you are exempt or non-exempt, we suggest contacting your attorney, accountant or calling the Department of Taxation.