Regulatory and Industry News Alerts from Armanino
Article

Nevada Tax Amnesty Program Is in Effect From February 1 – May 1, 2021

by Alex Thacher, Malcolm Ellerbe
January 19, 2021

Summary

The Nevada Department of Taxation has enacted Senate Bill 3 (SB 3), signed by Governor Steve Sisolak on July 20, 2020. It is a one-time penalty and interest amnesty program commencing on February 1, 2021, and ending on May 1, 2021, for businesses or individuals conducting business in Nevada who may have an existing tax liability.

Details

The Nevada tax amnesty program will help qualified businesses and individuals by waiving penalties and interest, upon the full payment of unpaid taxes, fees or assessments due and payable on or before June 30, 2020, including monthly tax returns due on or before May 31, 2020, and quarterly tax returns due on or before April 30, 2020.

The taxes/fees eligible for the amnesty program are: cigarette and other tobacco products tax, sales & use tax, commerce tax, modified business tax, cannabis tax, liquor tax, tire tax, transportation connection tax, short-term lessor (passenger car) tax, live entertainment tax, bank branch excise tax, exhibition facilities fees, centrally assessed property tax, and insurance premium tax. The amnesty program excludes the following taxes: real property transfer tax, locally assessed property tax and lodging tax.

The amnesty program disqualifies certain individuals and businesses that are currently in bankruptcy or have entered into a settlement agreement with the Department of Taxation for unpaid taxes. Also, it doesn’t apply to individuals and businesses who aren’t able to pay the outstanding tax in full or are currently under audit and have not received a final deficiency determination prior to the last day of the amnesty period.

Starting February 1, 2021, individuals and businesses can file/pay online or download the missing tax returns available on the department’s website. The base tax in a specific period must be paid in full during the amnesty filing period (February 1, 2021, to May 1, 2021) in order for amnesty to apply.

Insights

State amnesty programs can be useful in resolving prior period tax liabilities. It is important for companies to periodically review their nexus posture (physical presence and “Wayfair” economic presence) and the taxability of their offerings to ensure that they are not inheriting sales/use tax liabilities that they could be passing on to their customers. Business activity taxes and corporate income taxes also should be part of any state tax nexus study/liability evaluation.

Companies should also consider whether tax amnesty is the optimal route for settling prior-period liabilities. Most amnesty programs do not cover the most recent tax reporting periods (the Nevada program includes monthly returns due on or before May 31, 2020) and leave the company exposed for the most recent periods. Businesses experiencing rapid growth have much of their exposure in recent periods. A voluntary disclosure agreement (VDA) would cover those periods as well, even though the interest waiver generally would not be available, only the penalty.

If you have any questions or need help, contact our experts.

January 19, 2021

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Authors
Resources
Related News & Insights
The Bridge BOOtique
Live Event
Join us for an evening of shopping while supporting nearly 50 local, women-owned businesses.

October 27, 2021 | 02:00 PM - 06:00 PM PT
VIP Networking Event at Topgolf
Live Event
Swing by for an evening of conversation, cocktails and food with fellow Dallas nonprofit leaders.

October 14, 2021 | 03:30 PM - 06:30 PM PT
Armanino’s VIP Event at Community Summit
Live Event
See you in-person alongside your Dynamics peers in Houston!

October 13, 2021 | 04:00 PM - 06:00 PM PT