Nevada Legislature recently signed a bill that provides for a one-time amnesty program that allows businesses or individuals doing business in Nevada to have penalties and interest waived on the condition that they pay their outstanding taxes, fees, or assessments in-full during the programs three-month timeframe.
The amnesty program, which is effective from February 1, 2021, through May 1, 2021, is expected to recoup $21 million to help address Nevada’s budget shortfall as well as to give delinquent taxpayers a clean slate.
What kinds of tax are included in the amnesty program?
The types of taxes included in the amnesty program are Sales & Use Tax, Modified Business Tax, Commerce Tax and Excise Taxes which are made up of Cigarette Tax, Other Tobacco Products Tax, Liquor Tax, Bank Branch Excise Tax, Insurance Premium Tax, Tire Tax, Live Entertainment Tax, Short Term Lessor (Passenger Car), and Exhibition Facilities Fees, Transportation Connection Tax, and Cannabis Tax.
Who qualifies for the amnesty program?
The program applies to monthly tax returns that were due and payable on or before June 30, 2020, and quarterly tax returns due on or before April 30, 2020. The following types of outstanding tax liabilities can qualify for the program:
- unfiled tax returns,
- filed returns that have an unpaid balance,
- past audits,
- large untaxed purchases,
- errors found in prior tax returns.
Who does not qualify?
The amnesty program does not apply to any person/business that:
- is in bankruptcy,
- has an existing settlement agreement with the Department of Taxation or Nevada Tax Commission regarding an unpaid tax, fee, or assessment,
- is currently under audit and have not received a final deficiency determination prior to the last day of the amnesty period,
- is not able to pay the outstanding tax in full by May 1, 2021.
According to Nevada’s Department of Taxation website, a business or individual who pays the delinquent tax during the amnesty program may be selected for an audit in the same manner as a person who does not pay delinquent taxes during the amnesty program. Additional info can be found on Nevada’s Department of Taxation website here.
The amnesty is not only a great opportunity to pay past liabilities resulting from a sales tax audit, but it may also be an opportunity if you have lingering nexus issues in Nevada. Moreover, the amnesty program can arguably be used to pay previously issued tax liens without large interest and penalties that have accrued. If you have questions or need advice on how to handle unpaid sales tax, contact us and get advice from a state sales tax expert.
At Sales Tax Helper, not only do we represent companies during state sales tax audits and appeals, but we also provide important consulting services for you or your client’s businesses to prevent the audit in the first place. Schedule a free consultation here.