On May 31, the Nevada Legislature approved S.B. 483, a package of tax changes championed by Governor Brian Sandoval (R) collectively termed the Nevada Revenue Plan. The tax package includes an increase in the corporation annual business fee, an expanded payroll tax, a higher cigarette tax, and a new Commerce Tax on the gross receipts of businesses with at least $4 million in revenues in Nevada, along with making temporary payroll tax and sales tax increases permanent.
The package, totaling $1.4 billion in new and extended taxes over the biennium, won substantial backing despite reservations regarding the package’s structure, particularly the gross receipts-based Commerce Tax component. Public finance scholars tend to look upon gross receipts taxes unfavorably because they are non-neutral, lead to tax pyramiding, and distort business decision making. Both the Nevada Legislature and Nevada voters had rejected prior attempts to impose other types of gross receipts taxes, and some of those who supported the new tax package did so while expressing a desire to revisit the decision in the future.
The provisions of S.B. 483 go into effect on July 1, 2015. This includes the new Commerce Tax, which will be paid quarterly.