1st round of modified business tax refunds sent to businesses in Nevada

The Nevada Department of Taxation has sent out the first round of refund checks to businesses that paid a tax recently struck down by the state’s Supreme Court as being unconstitutional.

Some 22,621 taxpayers who paid a higher tax rate due to the passage of Senate Bill 551 during the 2019 legislative session were refunded $3.06 million, which includes interest, in the first round of refunds. SB 551 was rejected in mid-May as being unconstitutional.

“The refunds are for quarters ending Sept. 30, 2019 through March 31, 2021, for general businesses, financial institutions, and mining,” the Department of Taxation said in a release.

SB 551 extended an existing business tax in the 2019 legislative session without a two-thirds majority in both houses.

Democrats argued at the time that the tax could be extended because the state wasn’t creating a new tax, just extending an existing tax.

The court disagreed in a suit brought by Republicans, after the two-thirds majority wasn’t reached in the Senate, only in the Assembly.

How businesses get their return

Under state law, the Department of Taxation requires that the agency verifies that a credit is valid prior to sending out a refund.

In light of this, taxpayers must bring their account up to date before a refund can be issued.

Nevada law also requires that if any debt is on an account, a credit must first be used to satisfy that debt before the amount can be refunded.

Bring account up to date

Taxpayers can bring their account up to date. If a taxpayer has a delinquent tax return, including sales/use tax, modified business tax, commerce tax or excise tax, they should file those returns by mail or at https://tax.nv.gov/OnLineServices/Online_Services

No refunds will be issued to taxpayers with a delinquent return. Taxpayers should also update their address online or by calling the Department of Taxation’s call center at 866-962-3707.

The next round of refunds is scheduled for September.

Taxpayers who believe their account is up-to-date but do not receive a refund check in the next 10 days, should contact the Nevada Department of Taxation.