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

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 revenue of a business entity that is in excess of $4,000,000. (NRS 363C.200, 363C.300-363C.560) Sections 4 and 6 of this bill eliminate the $4,000,000 Nevada gross revenue threshold and replace it with a revenue threshold that is calculated on an annual basis. Section 4 provides the method for calculating the revenue threshold for a taxable year. For the taxable year beginning on July 1, 2025, section 4 sets the revenue threshold at $4,000,000 plus an additional amount that is 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 Items) for the 3 calendar years immediately preceding July 1, 2025. For all subsequent taxable years, section 4 provides that the revenue threshold is: (1) the same as the previous taxable year, if the average 12-month change in the Consumer Price Index for All Urban Consumers, West Region (All Items) for the previous 3 calendar years is negative; or (2) increased from the previous taxable year by an amount equal to the revenue threshold from the previous taxable year multiplied by the average 12-month percentage increase in Consumer Price Index for All Urban Consumers, West Region (All Items) for the previous 3 calendar years, if the average 12-month percentage change 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 in a taxable year exceeds the revenue threshold calculated as described in section 4 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 owed by a business entity to reflect that any Nevada gross revenue of a business entity that is equal to or below the revenue threshold is excluded from the 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 on any overpayment of any amount of the commerce tax at a rate specified in 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.