Nevada Gross Receipts Tax: Who Pays and How to File

The Nevada Commerce Tax is an annual tax calculated on the gross revenue of a business for operating in the state. This tax applies to most business structures, including corporations, partnerships, and sole proprietorships. It is not a tax on profit, but on the total money a business generates from its activities within the state over a fiscal year, which runs from July 1st to June 30th.

Determining Tax Liability

A business must file a Nevada Commerce Tax return if its gross revenue earned within the state exceeds $4,000,000 during the fiscal year. If a company’s revenue is at or below this $4 million mark, it is not required to file a return.

Certain organizations are exempt from the Commerce Tax regardless of their revenue levels. Exempt entities include:

• Nonprofit organizations recognized under section 501(c) of the Internal Revenue Code
• Various governmental entities
• Credit unions
• Passive entities, such as those that primarily own intangible investments like stocks and patents
• Certain trusts like grantor trusts

Calculating the Commerce Tax

The calculation of the Commerce Tax is tied to a business’s specific industry. The state uses the North American Industry Classification System (NAICS) to categorize businesses into one of 26 sectors, each with a distinct tax rate. These rates range from as low as 0.051% for Mining to as high as 0.331% for Rail Transportation. A business must identify its primary activity and find the corresponding NAICS code.

The tax is calculated on the Nevada gross revenue that exceeds $4,000,000 for the taxable year. For example, a retail trade business (NAICS 44-45) with $5,500,000 in Nevada gross revenue would first subtract the $4,000,000 threshold, leaving a taxable base of $1,500,000. Applying the retail trade tax rate of 0.111% to this amount results in a Commerce Tax liability of $1,665.

Businesses can receive a credit for their Commerce Tax payment against another state tax, the Modified Business Tax (MBT). The MBT is a quarterly payroll tax levied on gross wages paid by employers. A business can claim a credit equal to 50% of the Commerce Tax it has paid. This credit can then be used to offset the MBT liability over the four calendar quarters that follow the payment of the Commerce Tax.

To illustrate, the retail business from the previous example with a $1,665 Commerce Tax liability is eligible for an MBT credit of $832.50 (50% of $1,665). If this business’s MBT liability for the next quarter is $1,000, it can apply the $832.50 credit, reducing its MBT payment to just $167.50 for that quarter. If the credit had exceeded the MBT liability, the remaining credit amount would carry forward to the subsequent quarter.

Registration and Filing Requirements

To file the annual Commerce Tax Return, a business needs its total Nevada gross revenue for the fiscal year, its designated NAICS code, and its taxpayer identification number from the Nevada Department of Taxation. The primary method for submitting the return is through the Nevada Tax Center, the state’s online portal for tax filing and payment. After creating an account and registering the business, filers can complete the Commerce Tax return. Businesses with an annual tax liability of $10,000 or more are required to submit their payments electronically.

The annual deadline for filing the Commerce Tax return and paying any amount due is August 14th, which is 45 days after the end of the fiscal year. A 30-day extension to file can be requested in writing before the original due date, but interest will still apply to any tax paid after the original deadline.