AB 276 — Revises provisions governing the commerce tax. (BDR 32-192)

EXEMPT (Reprinted with amendments adopted on April 21, 2025) FIRST REPRINT A.B.

EffEffectEffect on theLocal State:Government:

Yes.No.No.

Effect on the State:

Yes.

prohibiting the payment of interest on an overpayment of commerce tax resulting from the use of a gross revenue threshold other than the adjusted threshold calculated and published by the Department of Taxation;

Existing law imposes an annual commerce tax on each business entity whose Nevada gross revenue in a fiscal year exceeds $4,000,000, with the rate of commerce tax based on the industry in which the business entity is primarily engaged.

Existing law imposes the tax only on the portion of the Nevada gross 363C.300-363C.560)revenue Sections 4 and 6 of this bill eliminate the $4,000,000 Nevada gross revenue threshold and replace it with a revenuebusiness thresholdentity that is calculatedin onexcess anof annual$4,000,000. basis.

Section(NRS 363C.200, 363C.300-363C.560) Sections 4 providesand the6 methodof forthis calculatingbill eliminate the $4,000,000 Nevada gross revenue threshold forand replace it with a taxablerevenue year.threshold that is calculated on an annual basis.

ForSection the4 taxableprovides yearthe beginningmethod onfor Julycalculating 1,the 2025,revenue section 4 sets the revenue threshold at $4,000,000 plus an additional amount that isis, section determined by multiplying $4,000,000 by the average 12-month percentage increase in the Consumer Price Index for All Urban Consumers, West Region (All subsequentItems) taxablefor years,the section3 4calendar providesyears thatimmediately thepreceding revenueJuly threshold1, is:2025.

(1)For theall samesubsequent as the previous taxable year,years, ifsection the4 averageprovides 12-monththat change in the Consumerrevenue Pricethreshold Indexis: for All Urban Consumers, West Region (All Items) for the previous 3 calendar years is negative;

or(1) (2) increased from the previoussame taxableas year by an amount equal to the revenue threshold from the previous taxable yearyear, multipliedif by the average 12-month percentagechange increase in Consumer Price Index for All Urban Consumers, West Region (All Items) for the previousConsumer 3 calendar years,years if the requires a business entity whose Nevada gross revenue in a taxable year exceeds the revenue threshold calculated as described in section 4 to file a return for that - *AB276* – 2 – taxable year and excuses all business entities whose Nevada gross revenue is equalnegative; to or less than the revenue threshold from the requirement to file such a return for inflation index” and “revenue threshold” for the purposes of the provisionsmer price governing the commerce tax.

Sectionsor 7-33(2) ofincreased thisfrom billthe makeprevious conformingtaxable changesyear toby provisionsan governingamount equal to the calculationrevenue ofthreshold from the commerceprevious taxtaxable owedyear multiplied by athe businessaverage entity12-month topercentage reflectincrease thatin anyConsumer NevadaPrice grossIndex revenuefor ofAll aUrban business- entity*AB276_R1* that– is2 equal– toConsumers, orWest belowRegion (All Items) for the revenueprevious threshold3 iscalendar excludedyears, fromif the calculationaverage of12-month thepercentage commercechange tax.for that period was positive.

Under section 4, the revenue threshold calculated for each taxable year must be rounded to the nearest $100,000.

Section 6 requires a business entity whose Nevada gross revenue to file a return for that taxable year and excuses all business entities whose Nevada gross revenue is equal to or less than the revenue threshold from the requirement to file such a return for that taxable year.

Sections 2, 3 and 5 of this bill define the terms “consumer price inflation index” and “revenue threshold” for the purposes of the provisions governing the commerce tax.

Sections 7-33 of this bill make conforming changes to provisions governing the calculation of the commerce tax entity that is equal to or below the revenue threshold is excluded from theiness calculation of the commerce tax.

Under existing law, a business entity that overpays the commerce tax is entitled to a refund of the amount of the overpayment if, with certain exceptions, the business entity claims the refund within a certain period.

(NRS 363C.600) With certain exceptions, existing law requires such a business entity to be paid interest existing law.

However, the Department of Taxation is prohibited from paying interest to a business entity if the Department determines that any overpayment has been made intentionally or by reason of carelessness.

(NRS 363C.620) Section 33.5 of this bill prohibits the Department from paying interest on such an overpayment of the commerce tax because a business entity uses a revenue threshold to calculate the amount of commerce tax it owes other than the revenue threshold calculated by the Department and published pursuant to section 4.

The revenue threshold calculated pursuant to this paragraph must be rounded to the nearest $100,000.

- *AB276_R1* – 3 – (1) If the average 12-month percentage change in the consumer price inflation index for the 3 calendar years immediately preceding the taxable year for which the revenue threshold is being calculated is positive, the revenue threshold for the immediate preceding taxable year plus the product of the revenue threshold for the immediately preceding taxable year multiplied by the average percentage increase in the consumer price inflation index for the 3 calendar years immediately preceding the taxable year for which the revenue threshold is being calculated.

A revenue threshold calculated pursuant to this subparagraph must be rounded to the nearest $100,000.

-A *AB276*revenue –threshold 3calculated –pursuant 2.to this subparagraph must be rounded to the nearest $100,000.

On2. or before March 1 of each year, the Department shall calculate and publish on its Internet website the revenue threshold for the taxable year beginning the following July 1.

Not later than 30 days after July 1, 2025, the Department shall calculate and publish on its Internet website the revenue threshold for the taxable year that began on July 1, 2025.

Not later than March 1 of each subsequent year, the Department shall calculate and publish on its Internet website the revenue threshold for the taxable year beginning the following July 1.

- *AB276_R1* – 4 – 3.

If the commerce tax is paid during the period of extension, no penalty or late charge may be imposed for failure to pay the commerce tax at the time required, but the business entity shall pay interest at the rate of 0.75 percent per month from the date on which the amount would have been due without the extension - *AB276* – 4 – until the date of payment, unless otherwise provided in NRS 360.232 or 360.320.

- *AB276_R1* – 5 – 2.

- *AB276* – 5 – (a) Business entities operating mines, quarries or oil and gas wells on their own account or for others on a contract or fee basis.

and (b) All business entities primarily engaged in providing telecommunications and the services related to that activity, - *AB276_R1* – 6 – including, without limitation, telephony, cable and satellite distribution services, Internet access and telecommunications reselling services.

Examples of business entities in this category include, without limitation, general contractors, design-builders, construction - *AB276* – 6 – managers, turnkey contractors, joint-venture contractors, specialty trade contractors, for-sale builders, speculative builders and merchant builders.

- *AB276_R1* – 7 – 3.

The amount of the commerce tax for a business entity included in this category is the amount obtained by subtracting - *AB276* – 7 – [$4,000,000] the revenue threshold from the Nevada gross revenue of the business entity for the taxable year and multiplying that amount by 0.111 percent.

- *AB276_R1* – 8 – Sec.

(f) Postal services, including, without limitation, the activities of the United States Postal Service and its subcontractors operating - *AB276* – 8 – under a universal service obligation to provide mail services, deliver letters and small parcels, and rural post offices on contract to the United States Postal Service;

- *AB276_R1* – 9 – Sec.

- *AB276* – 9 – (c) Broadcasting, except on the Internet, including, without limitation, creating content or acquiring the right to distribute content and subsequently broadcast the content;