Commerce Tax Registration and Tax Return

Taxes

Many of you have received your Welcome to Nevada Commerce Tax letters by now.  You can see our letter here for an example.

This is a new tax on Nevada gross revenue over $4,000,000.

Although most small businesses will not owe any tax, all businesses, including landlords, farmers and royalty earners, are required to register and file a tax return.

Registration

The Welcome Letter included a Commerce Tax Additional Information Form. You need to complete this form and mail it back to them in the envelope provided. You can instead complete the form online. Once there, click on the box with the Welcome Letter header and then in the fourth paragraph click on the link in blue “the Commerce Tax Additional Information Form” and fill it out. There is a button at the bottom of the form that allows you to email the form to them but since the form will include your social security number and the email is unsecured we do not recommend this. Instead print the form and mail in the envelope they provided.  Note: get your NAICS code first because if you click on the link provided on the form and then go back to the form your data is not saved.

If you don’t have the envelope, mail the form to Nevada Department of Taxation, 1550 College Pkwy No 115, Carson City, NV, 89706-7939.

The form asks for your NAICS code. This is important as it establishes the rate of tax you will pay because the tax rate is different for each industry. Once you have listed your NAICS code on the first tax return you are locked into that rate (if the tax applies) and it can only be changed with the permission of the Nevada Department of Taxation.

You can find your NAICS code on your tax return as follows:

  • For Corporations filing an 1120 it is on page 3 on Schedule K, 2(a).
  • For Corporations filing an 1120S it is on page 1 in Box B.
  • For Partnerships filing a 1065 it is on page 1 in Box C.
  • For sole-proprietors it is on Schedule C in Box B.
  • For landlords filing a Schedule E it is not listed on your tax return but the code is 531110 for residential leases and 531120 for nonresidential leases.

For the Taxpayer ID (TID) at the top right of the form use the number listed on the Welcome Letter you received.  The form also asks about 2/3 of the way down the form for “TID number(s) for business currently registered in Nevada above”.  On this line you will list your Nevada tax identification number used for your Modified Business Tax and your Sales or Use Tax numbers.  These may or may not be the same as the number on the Welcome Letter.

If you did not receive a Welcome Letter but you are already registered with Nevada Department of Taxation, you need to go to the website using the link above and complete the Commerce Tax Additional Information Form and mail it in.

If you are not already registered with Nevada Department of Taxation then you need to register here.

Tax Return

According to Nevada Revised Statue (NRS) 363C.055 “Nevada Gross Revenue” means the gross revenue of a business entity from engaging in business in this State, as adjusted pursuant to NRS 363C.210 and sitused to this State pursuant to NRS 363C.220.

NRS 363C.210 lists the deductions from gross revenue a business is entitled to.

NRS 363C.220 lists the rules for determining situsing.  Situs is a Latin term for the location from where something took place. In this context it is used to determine if a transaction is subject to the Nevada Commerce Tax.

NRS 363C.220 says that a transaction is sitused to Nevada and therefore subject to the Nevada Commerce Tax if:

  • For rents an royalties from real property if the real property is located in Nevada.
  • For revenue from the sale of real property if the real property is located in Nevada.
  • For rents and royalties from tangible personal property if the property is located or used in Nevada.
  • For revenue from the sale of tangible personal property if the property is delivered or shipped to a buyer in Nevada.
  • For revenue from the sale of transportation services if both the origin and destination point are in Nevada.
  • For revenue from the sale of services if the purchaser benefits in Nevada with respect to what is purchased (where the purchaser ultimately uses or receives the benefit from the service is what matters here).
  • For revenue not otherwise described above if the gross receipts are from business conducted in Nevada.  Here, the physical location of the purchaser is paramount.

For those businesses with under $4,000,000 of Nevada gross revenue the tax return completion is very simple.  Click here to see the tax return and then click on Commerce Tax Return.

You will complete the top section with your NAICS code, Nevada Tax ID number, taxable year (July 1, 2015 to June 30, 2016), your legal name and address and then check the box that your gross revenue is under $4,000,000, go to the bottom of the form and check the box for penalty of perjury, sign, title, date and phone number and mail it in.

You can also register here with Nevada Department of Taxation and file the return online.

If your Nevada gross revenue is over $4,000,000 please contact us for help with this form.  Even if your revenue is less than $4,000,000 we are here to help you so give us a call.