Nevada recently passed legislation enacting a new commerce tax on business taxpayers that have more than $4 million of Nevada-sourced gross receipts. This new tax will affect all businesses, including Individuals that file a Schedule C, E and/or F with Nevada activity. A partial list of exceptions are as follow:

The commerce tax is a gross receipts tax. There is no deduction for the cost of goods sold or any other business expenses. The law does specifically exclude certain types of gross receipts and allows for certain deductions. A partial list of the exclusions and deductions are as follows:

The tax is imposed only on gross receipts in excess of $4 million. For example, assume a business has $5 million of Nevada gross receipts after all exclusions and deductions. The business would be taxed on $1 million of gross receipts ($5 million – $4 million).

The Commerce Tax has flat tax rates specific to each industry. These range from .051% to .331%. Examples of industries and their rates are as follows:

If an entity is involved in multiple industries, the primary business industry will determine the tax rate to apply.

The tax year for the commerce tax will be July 1 – June 30 for all businesses. This tax is effective beginning July 1, 2015 with the first tax return due August 14, 2016.