Nevada sales and use tax laws have been updated to conform to the Streamlined Sales and Use Tax (SST) Agreement.
Nevada has expanded the definition of nexus by moving from the current statutory standard of a “retailer maintaining a place of business” in Nevada to the broader constitutional standard of nexus that imposes sales and use tax upon every retailer whose activities satisfy the Commerce Clause nexus standard.
The legislation enacts direct mail definitions and sourcing provisions in conformity with the SST Agreement.
Definitions: “Advertising and promotional direct mail” is defined as “direct mail” that is primarily intended to attract public attention to a product, person, business, or organization or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization. In this context, “product” means tangible personal property, an item transferred electronically, or a service. “Direct mail” is newly defined as printed material delivered or distributed by U.S. mail or another delivery service to a mass audience or to addressees on a mailing list provided by the purchaser (or at the purchaser’s direction) when the cost of the items is not billed directly to the recipient. The definition of “direct mail” includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail retailer for inclusion in the package containing the printed material. The definition of “direct mail” does not include multiple items of printed material delivered to a single address.
“Other direct mail” is defined as any direct mail that is not “advertising and promotional direct mail,” regardless of whether “advertising and promotional direct mail” is included in the same mailing. Examples of “other direct mail” include, but are not limited to: (1) transactional direct mail containing personal information specific to the addressee, such as invoices, bills, statements of account, or payroll advices; (2) any legally required mailing, such as privacy notices, tax reports, or stockholder reports; and (3) other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents, such as newsletters or informational pieces. Expressly excluded from the definition of “other direct mail” are the development of billing information and the provision of any data processing service that is more than incidental to the production of printed material.
Sourcing: The provision regarding direct mail sourcing is amended to provide separate sourcing provisions for advertising and promotional direct mail and for other direct mail. Generally, purchasers of advertising and promotional direct mail or other direct mail may provide the seller with a direct pay permit, an SST exemption certificate, or other written statement that is approved, authorized, or accepted by the state. In addition, a purchaser of advertising and promotional direct mail may provide the seller with information showing the jurisdictions where such mail is to be delivered to recipients.
If a purchaser of advertising and promotional direct mail or other direct mail provides a direct pay permit, SST exemption certificate, or statement, the seller is generally relieved of all obligations to collect and remit the tax, the sale is sourced to the jurisdictions where the mail is to be delivered to recipients, and the purchaser reports and pays the tax. If a purchaser of advertising and promotional direct mail provides the seller with the jurisdictional delivery information, the seller must source the sale to the jurisdictions where the mail is delivered to recipients and must collect and remit the tax. If a purchaser of advertising or promotional direct mail does not provide a direct pay permit, SST exemption certificate, statement, or jurisdictional delivery information, the sale is sourced to the address from which the tangible personal property was shipped or from which the service was provided. If a purchaser of other direct mail does not provide a direct pay permit or SST exemption certificate, the sale is sourced to the purchaser’s address.
Sellers that do not use certified service providers as an agent may elect to be registered in one or more states as a seller that anticipates making no sales into the state or states if the seller has not had sales into the state or states for the preceding 12 months. This election does not relieve the seller of its agreement to collect taxes on all sales into the states or its liability for remitting to the proper states any taxes collected.
The statutory provisions regarding the taxation of delivery changes have been amended. Any invoice, billing, or other document given to a purchaser that indicated that the sales price for which tangible personal property is sold may state separately any amount received by the seller for any transportation, shipping or postage charges for the delivery of the property to a location designated by the purchaser and must state separately any amount received by the seller for: (1) any installation charges for the property; (2) any credit for any exempt trade-in; (3) any interest, financing and carrying charges from credit extended on the sale; and (4) any taxes legally imposed directly on the consumer.
Improperly Claimed Exemption
New requirements have been enacted regarding the liability of a seller for accepting certain certificates of exemption which indicated that the claimed exemption is not available. A retailer is liable for the payment of sales tax if the purchaser improperly claimed an exemption and the retailer: (1) fraudulently failed to collect the tax; (2) solicited a purchaser to participate in an unlawful claim of an exemption; or (3) accepted a certificate of exemption from a purchaser who claimed an entity-based exemption and the item was received by the purchaser at the seller’s location, and the department posted on its website a certificate of exemption that clearly and affirmatively indicated that the claimed exemption was not available. An “entity-based exemption” is defined as an exemption based on who purchases the product or who sells the product and that is not available to all.
Tax Returns and Remittances
The legislation amends some filing and due date provisions to conform with the SST Agreement.
Electronic filing: The filing provisions have been amended to provide that simplified tax returns may be electronically filed.
Due dates: Any sales or use tax due and payable on a day on which a Federal Reserve Bank is closed and, as a result of that closure, the taxpayer is not able to remit the tax electronically as required, the tax may be paid on the next succeeding day on which the Federal Reserve Bank is open. Additionally, if any sales or use tax is due on a Saturday, Sunday or legal holiday, the return may be filed on the next succeeding business day.
The bill deletes good faith requirements that are not allowed under the Agreement and also deletes certain conforming provisions that do not apply to Nevada.
Ch. 454 (S.B. 34), Laws 2011, effective June 16, 2011