TWIST - June 14, 2021

Welcome to TWIST for the week of June 14th, featuring Sarah McGahan from the Washington National Tax State and Local Tax practice.

First up this week are two developments from Nevada. Legislation was recently enacted that adopts a new excise tax imposed on the gross receipts of businesses engaged in extracting gold and silver in the state.  The new tax is effective July 1, 2021 and is imposed at a 0.75 percent rate on taxpayers with Nevada gross revenue for the tax year of more than $20 million but not more than $150 million. A rate of 1.10 percent applies to taxpayers with Nevada gross revenue exceeding $150 million. Business entities with $20 million or less in gross revenue for a taxable year are not be required to file a return. 

In addition, the Nevada Department of Taxation recently issued guidance on obtaining Modified Business Tax refunds. Recall, the Nevada Supreme Court recently held that a Nevada law repealing a previously legislated reduction of the Modified Business Tax rate was unconstitutionally enacted because the legislation that maintained the current rates did not receive a 2/3 vote in each legislative chamber.  Because the rate should have been reduced back in 2019, Modified Business taxpayers will be entitled to refunds, assuming they do not have any other outstanding tax liabilities.

Moving over to Washington State, a trial court in King County recently held that Seattle’s new payroll expense tax was a constitutionally permissible excise tax on the privilege of doing business in the City. In other Washington State news, oral arguments were heard on May 25, 2021 in a case addressing whether the 1.2 percent B&O surcharge levied on specified financial institutions impermissibly discriminated against out of state banks. Stay turned to TWIST for future updates on the litigation in both these cases.

Finally, in Vermont and Colorado legislation was recently enacted affecting marketplace facilitators that facilitate sales of food and alcohol.  

Thank you for listening to TWIST and stay well.