Every business registered in the state of Nevada, except 501c nonprofit organizations who get to file an initial Exempt Status Entity Form with the Department of Taxation at the following link http://tax.nv.gov/uploadedFiles/taxnvgov/Content/FAQs/Exempt_Status_Entity_Form.pdf
is subject to the Nevada Commerce Tax and must file the Commerce Tax Return by August 15th regardless of whether you have a tax liability or not.
Every business filed in the state will receive a ‘Welcome To Nevada Commerce Tax Letter’ from the Department of Taxation stating that you’re pre-registered and have been issued a Taxpayer ID number.
This Taxpayer ID number is different from your Nevada Business ID number which is located on your Nevada State Business License. Your Taxpayer ID number is what you will use to file the Commerce Tax Return. If you did not receive a letter, please contact the Nevada Department of Taxation Taxpayer Call Center at 866-962-3707 to get the Tax ID number assigned to your business.
Before you can file, there’s a couple of steps, you’ll need to take.
STEP 1: You have to determine your NAICS code, that’s the acronym for the North American Industry Classification System from the 26 different categories selected by the state to choose from. To determine which NAICS code applies to your business you can look it up at the following link http://www.naics.com/search/ and then drill down from the initial category to determine which one best describes your primary business activity.
Please note: If your business operates multiple types of businesses under its single entity that don’t fall under the same NAICS code (like a bar and laundromat), the NAICS code would be the category where the highest percentage of revenue comes from.
STEP 2: You have to mail in or file online at http://tax.nv.gov/comtax/ the Commerce Tax Additional Information Form which is how you complete your registration. The state has to gather information such as your federal tax id number; the names and addresses of the owners, partners, corporate offers, managers and members of the business.
They also want to know if you’re enrolled in any other taxes in the state such as the Modified Business Tax – which is tied to a Nevada business that has Nevada employees;
The Sales/Use Tax applies if you sell tangible goods in the state whereby you have to collect and remit the sales tax.
Use Tax means that if you bought something outside the state of Nevada and did not pay sales tax, that by law you’re supposed to report and pay the sales tax that you would have paid had you purchased the same item in the state.
Certificate of Authority relates to a retailor who does not maintain a place of business in the state, but obtains a certificate authorizing him to collect the sales tax from a purchaser here and then turns around and pays the sales tax to the state. Typically, you see this with online retail organizations.
Excise taxes apply to sales of gasoline, cigarettes, alcohol, cellphones, and vehicle registration and title fees all of which are flat per-unit taxes that must be paid directly to the Nevada government by the merchant before the goods can be sold.
You must submit the Commerce Tax Additional Information Form so you will be ready to file by August 15th.
Now, let’s talk about the Commerce Tax Return.
If your business’s gross revenue, that’s money earned only in the state of Nevada, ranges from zero to $3,999,999.99 cents during the state’s fiscal year which begins July 1 and ends on June 30th, the following year, you qualify for the simplified reporting. You still have to submit the tax return which may take 2 minutes to file on line, but remember the really good news, there’s no tax due!
Future heads up. If you’ve always been under the four million mark and during the next fiscal year, again that’s July 1 through June 30th your status changes, meaning you now have Nevada gross revenues that exceed four million dollars, then be aware you’ll need to complete the entire tax return the next time you file.
As I said, it may take two minutes to file if fall under the four million in gross revenue so let me share these quick instruction of what you’ll need to complete:
Fill in the taxable year (example July 1, 2015 through June 30, 2016)
Fill in the State Tax ID Number as shown on the Welcome Letter/upper right hand corner.
Fill in the NAICS code
Fill in the Business name
Fill in the Business address
Check the box: I declare that the Gross Revenue from engaging in business in Nevada of the above Business Entity did not exceed $4,000,000 during the taxable year.
SKIP TO BOTTOM OF FORM: Check the ‘Under Penalty of Perjury’ box, sign, put in your phone number, name, title and date.
PRINT THE RETURN for your records.
Then Hit the Submit via e-mail button to complete the filing online.
Or you can mail it to the Nevada Department of Taxation
Please make sure you task yourself to file the tax return every August 15th, because the state will not send any reminders.
Also, make sure you keep copies of your returns for a minimum of four years, however I recommend you keep them for as long as you have the business.
Now, let’s move onto those business that have Nevada Gross Revenue that Exceeds Four Million dollars. The date to file is still August 15th and of course you have to pay the commerce tax which is based on the rate associated with your NAICS code.
You can request an extension to file for up to 30 days without penalty but, if there are any taxes due, interest will accumulate along with any penalties assessed after the 30 day extension expires.
If you’re a Nevada resident and your business is incorporated outside of Nevada, you should complete the Nexus Questionnaire to determine if you are subject to the commerce tax. Most likely not, but you better make sure.
I can’t even begin to describe how complicated they’ve made the ability to calculate the tax which for some there’s at least a few tax credits and/or industry specific deductions that can be applied against the gross revenue.
I’m going to recommend you use the services of a tax professional and maybe more specifically a Nevada based tax professional to prepare your commerce tax return because remember this return is based on the gross revenue you generated during the state of Nevada’s fiscal year end not your company’s regular fiscal year end.
We can of course, offer some great recommendations for our clients.
One note of caution. If you have, or are going to go out of Business in the State of Nevada, I suggest you call us here at Sage International to provide assistance with properly dissolving the company. Think about it, without properly dissolving and filing final tax returns, both the IRS and the State of Nevada have every reason to believe you are still in business and are legally required to file annual tax returns.
Since there’s no getting around the requirement to file, I wanted to make sure everyone who has a Nevada corporation or Nevada LLC understands the full meaning of “staying in compliance.”
Let us know if we can help.