Nevada: New Excise Tax Imposed on Gold or Silver Extractors

Assembly Bill 495, which was recently enacted in Nevada, provides that effective July 1, 2021 an annual excise tax is imposed on “business entities” that have Nevada gross revenues in excess of $20 million in a taxable year. A “business entity” for purposes of the annual excise tax is defined as a corporation, partnership, limited-liability company or partnership, business or professional association, and any other entity (except those specifically excluded) that is engaged in the business of extracting gold or silver in the state of Nevada. “Gold” and “silver” is defined to include (1) gold-bearing and silver-bearing ores, quartz or minerals from which gold and silver are extracted; (2) gold and silver bullion; and (3) the products or derivatives of gold and silver.

Under the bill, the tax rates vary based on the taxpayer’s Nevada gross revenue (as defined). A 0.75 percent rate is imposed on Nevada gross revenue of more than $20 million but not more than $150 million in a taxable year (defined as the calendar year). A rate of 1.10 percent applies to Nevada gross revenue exceeding $150 million in any tax year. Business entities with Nevada gross revenue in excess of $20 million in a taxable year must file a return with the Department of Taxation on or before April 1 immediately following the end of that taxable year. Business entities with $20 million or less in gross revenue for a taxable year are not required to file a return. The Department may extend the deadline for tax payments up to 30 days upon a showing of good cause. If tax is paid during the period of extension, no penalty or late charge may be imposed. However, the taxpayer is responsible for paying interest that accrues at the rate of 1.0 percent per month from the date the tax was due (without extension) until the date of payment. Assembly Bill 495 also amends the Commerce Tax law to provide that, for Commerce Tax purposes, business entities do not include a person engaged in the business of extracting gold or silver in Nevada. For more information, please contact Sarah McGahan.