DALLAS, July 6, 2015 /PRNewswire/ -- Nevada enacted a new Commerce Tax with the
passage of Senate Bill 483. The tax is imposed annually on
Nevada-sourced gross revenue in
excess of a $4 million statutory
exclusion. The tax rates range from 0.051% to 0.331% and are
determined by the predominant classification of the taxpayer's
business activities. The tax became effective July 1, 2015, and the first tax return is due by
August 14, 2016.
Commerce Tax Imposed
The new Commerce Tax is a
modified gross receipts tax imposed on each taxable business entity
for the privilege of doing business in Nevada. It creates 26 business categories,
each consisting of one or more industry classifications as defined
by the 2012 North American Industry Classification System (NAICS).
Each business category is assigned a separate tax rate. The rates
range from 0.051% to 0.331%, depending on the category assigned by
the NAICS classification. Any business that does not fit into an
assigned category is taxed at the rate of 0.128%. If a business
spans multiple categories, it is taxed using the category from
which the majority of its economic activity is derived. Once a tax
category is selected, it cannot be changed unless authorized by the
Department of Taxation.
The Commerce Tax is imposed annually on an included entity's
gross revenue, less specific exclusions and deductions such as
pass-through revenue, passive income, cash discounts, and other
types of excluded receipts. The remaining gross revenue is then
sitused to determine the Nevada
gross revenue. Any amount in excess of $4 million is Nevada adjusted gross revenue. The Commerce
Tax is computed by multiplying the Nevada adjusted gross revenue by the
corresponding tax rate for the company's primary business category.
Nevada businesses that already pay
a gross receipts-type tax (gaming, mining, and insurance) can
exclude revenue from those activities from the Commerce Tax.
Businesses may claim a credit of 50% of their Commerce Tax against
their Modified Business Tax.
There will be many challenges for companies doing business in
Nevada to determine the correct
taxable amount and which tax classification applies to the business
activities. Ryan can consult with companies before the first tax
return is due in August 2016 to
ensure the calculations and activity classification related to this
new tax are correct.
About Ryan
Ryan is an award-winning global tax
services firm, with the largest indirect and property tax practices
in North America and the seventh
largest corporate tax practice in the
United States. With global headquarters in Dallas, Texas, the Firm provides a
comprehensive range of state, local, federal, and international tax
advisory and consulting services on a multi-jurisdictional basis,
including audit defense, tax recovery, credits and incentives, tax
process improvement and automation, tax appeals, tax compliance,
and strategic planning. Ryan is a three-time recipient of the
International Service Excellence Award from the Customer Service
Institute of America (CSIA) for its commitment to world-class
client service. Empowered by the dynamic myRyan work
environment, which is widely recognized as the most innovative in
the tax services industry, Ryan's multi-disciplinary team of more
than 2,100 professionals and associates serves over 12,000 clients
in more than 40 countries, including many of the world's most
prominent Global 5000 companies. More information about Ryan can be
found at ryan.com.
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TECHNICAL INFORMATION CONTACTS:
Darcy Kooiker
Principal
Ryan
425.440.2333
darcy.kooiker@ryan.com
Phillip Gustafson
Director
Ryan
720.524.0022
phillip.gustafson@ryan.com
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SOURCE Ryan, LLC