NAC: CHAPTER 363A - TAXES ON FINANCIAL INSTITUTIONS

[Rev. 5/24/2022 10:06:40 PM]

[NAC-363A Revised Date: 8-18]

CHAPTER 363A - TAXES ON FINANCIAL INSTITUTIONS

GENERAL PROVISIONS

363A.010 Definitions.

363A.020 “Commission” defined.

363A.030 “Department” defined.

363A.040 “Division” defined.

363A.050 “Employer” defined.

363A.060 “Health care deduction” defined.

363A.070 “Indian tribe” defined.

363A.090 “Nonprofit organization” defined.

363A.100 “Political subdivision” defined.

363A.110 “Self-insured employer” defined.

ADMINISTRATION

363A.330 Maintenance and availability of records of employer.

IMPOSITION AND COLLECTION

Excise Tax on Banks

363A.350 “Bank” interpreted.

363A.360 Amount of tax due for calendar quarter.

Payroll Tax

363A.380 Registration of employer with Department; filing of returns and reports.

363A.400 Exemption of Indian tribes, nonprofit organizations and political subdivisions.

363A.411 Application by employer for designation as payroll provider; requirements for designation; revocation or cancellation of designation; commerce tax credit.

363A.415 Employer ineligible to receive commerce tax credit if deficient in payment of commerce tax; amendment of tax return for payroll tax upon partial or full satisfaction of deficiency; adjustments to employer’s account.

363A.420 Health care deduction: Depreciation of property by self-insured employer.

363A.430 Correction of errors in filed returns.

Credit for Matching Employee Contributions to Prepaid Tuition Contracts and College Savings Accounts

363A.500 “Prepaid tuition contract” defined.

363A.505 “Qualified beneficiary” defined.

363A.510 Employer required to provide verification of matching contribution with quarterly return; submission of list of all matching contributions made on behalf of employees.

363A.515 Computation of annual limit of tax credit.

GENERAL PROVISIONS

NAC 363A.010 Definitions. (NRS 360.090, 363A.070) As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 363A.020 to 363A.110, inclusive, have the meanings ascribed to them in those sections.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003; A by R194-05, 2-23-2006)

NAC 363A.020 “Commission” defined. (NRS 360.090, 363A.070) “Commission” means the Nevada Tax Commission.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.030 “Department” defined. (NRS 360.090, 363A.070) “Department” means the Department of Taxation.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.040 “Division” defined. (NRS 360.090, 363A.070) “Division” means the Employment Security Division of the Department of Employment, Training and Rehabilitation.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.050 “Employer” defined. (NRS 360.090, 363A.070) “Employer” has the meaning ascribed to it in NRS 363A.030.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.060 “Health care deduction” defined. (NRS 360.090, 363A.070) “Health care deduction” means the deduction allowed by NRS 363A.135.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003; A by R194-05, 2-23-2006)

NAC 363A.070 “Indian tribe” defined. (NRS 360.090, 363A.070) “Indian tribe” has the meaning ascribed to it in NRS 363A.030.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.090 “Nonprofit organization” defined. (NRS 360.090, 363A.070) “Nonprofit organization” has the meaning ascribed to it in NRS 363A.030.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.100 “Political subdivision” defined. (NRS 360.090, 363A.070) “Political subdivision” has the meaning ascribed to it in NRS 363A.030.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.110 “Self-insured employer” defined. (NRS 360.090, 363A.070) “Self-insured employer” means an employer that provides a program of self-insurance for its employees.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

ADMINISTRATION

NAC 363A.330 Maintenance and availability of records of employer. (NRS 360.090, 363A.070, 363A.080) Each employer shall maintain and, upon the request of the Department, provide to the Department:

1. Copies of any reports filed with or submitted to the Division by the employer.

2. Copies of any records required to be maintained by the employer pursuant to NAC 612.020.

3. If the employer claims the health care deduction:

(a) Records describing the nature and amount of any contributions for health insurance or an employee benefit plan made by any employees of the employer.

(b) Proof of any payments for health insurance or a health benefit plan made by the employer.

(1) Any health benefit for which the health care deduction is claimed, including, without limitation, the cost of the benefit; and

(2) The number of employees covered under the applicable health insurance or health benefit plan.

(d) Such records as are required to explain and verify any apportionment of payments between the employer and any of its employees for any pertinent health insurance or health benefit plan.

4. Any other records reasonably requested by the Department if:

(a) The records are available to the employer; and

(b) The disclosure of the records is not prohibited pursuant to NRS 49.225, 449.720, 683A.0873 or 689B.280, or any other state or federal law regarding the confidentiality of the records.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

IMPOSITION AND COLLECTION

Excise Tax on Banks

NAC 363A.350 “Bank” interpreted. (NRS 360.090, 363A.070, 363A.120) For the purposes of NRS 363A.120, the Commission interprets the term “bank” to exclude a federal land credit association, farm credit bank, agricultural credit association or similar institution organized under the provisions of the Farm Credit Act.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.360 Amount of tax due for calendar quarter. (NRS 360.090, 363A.070, 363A.120)

1. The entire amount of the excise tax imposed by NRS 363A.120 becomes due for all the branch offices in excess of one operated or otherwise maintained by a bank in any county in this State on the first day of a calendar quarter, regardless of whether the bank ceases to operate or otherwise maintain any of those branch offices during that calendar quarter.

2. If the operation or other maintenance of a branch office commences after the first day of a calendar quarter, no excise tax is due pursuant to the provisions of NRS 363A.120 for the branch office for that calendar quarter.

3. For the purposes of this section:

(a) The operation or other maintenance of a branch office shall be deemed to commence on the date the branch office first opens for business to the public.

(b) If the first day of a calendar quarter does not occur on a regular banking day for a bank, the bank shall be deemed to operate or otherwise maintain a branch office on that date if the bank:

(1) Held the branch office open for business to the public at any time during the immediately preceding 5 regular banking days for the bank; and

(2) Holds the branch office open for business to the public at any time during the immediately succeeding 5 regular banking days for the bank.

4. As used in this section, the words and terms defined in NRS 363A.120 have the meanings ascribed to them in that section.

(Added to NAC by Dep’t of Taxation by R152-03, eff. 10-30-2003; A by Tax Comm’n by R194-05, 2-23-2006)

Payroll Tax

NAC 363A.380 Registration of employer with Department; filing of returns and reports. (NRS 360.090, 363A.070, 363A.130)

1. An employer that fails to register with the Division pursuant to NRS 612.535 shall register with the Department for payment of the excise tax imposed by NRS 363A.130.

2. Each employer shall:

(a) File with the Department each quarterly return required by paragraph (a) of subsection 3 of NRS 363A.130, regardless of whether any tax is due from the employer for that quarter; and

(b) Provide to the Department, on such forms as the Department prescribes, any reports required by the Department for the administration or enforcement of this chapter or chapter 363A of NRS.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.400 Exemption of Indian tribes, nonprofit organizations and political subdivisions. (NRS 360.090, 363A.070)

1. An Indian tribe, a nonprofit organization or a political subdivision is exempt from the provisions of NRS 363A.130, regardless of whether the Indian tribe, nonprofit organization or political subdivision files a written election pursuant to NRS 612.565 or 612.570.

2. Any person who claims to be a nonprofit organization exempt from the provisions of NRS 363A.130 shall, upon the request of the Department:

(a) If the person does not claim to be an exempt religious organization, provide to the Department a letter from the Internal Revenue Service indicating that the person has qualified as a tax-exempt organization pursuant to 26 U.S.C. § 501(c); or

(b) If the person claims to be an exempt religious organization, provide to the Department such records as the Department deems necessary to demonstrate that the person meets the criteria to qualify as a religious organization pursuant to 26 U.S.C. § 501(c) and any federal regulations relating thereto.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.411 Application by employer for designation as payroll provider; requirements for designation; revocation or cancellation of designation; commerce tax credit. (NRS 360.090, 363A.070, 363A.130)

1. An employer may apply to the Department to be designated as a payroll provider by submitting to the Department such forms, application materials and supporting documents as the Department may require.

2. The Department shall designate an employer as a payroll provider if the employer demonstrates to the satisfaction of the Department that:

(a) The employer is a member of an affiliated group which:

(1) Provides payroll services for one or more members of the affiliated group;

(2) Pays wages to employees who provide services on behalf of one or more members of the affiliated group; and

(3) Reports and pays the tax imposed by NRS 363A.130 on wages paid to employees who provide services on behalf of one or more members of the affiliated group; and

(b) Each member of the affiliated group for which a tax credit will be claimed pursuant to subsection 4 would have a liability for the tax imposed by NRS 363A.130 if the persons who provide services for that member were treated as employees of that member rather than as employees of the employer.

3. The Department may revoke or cancel the designation of an employer as a payroll provider if the employer no longer qualifies for that designation pursuant to subsection 2. The revocation or cancellation of the designation of an employer as a payroll provider does not preclude the Department from designating another employer as a payroll provider for the affiliated group if the other employer qualifies as a payroll provider pursuant to this section.

4. In reporting and computing the tax imposed by NRS 363A.130, a payroll provider may subtract from the amount calculated pursuant to subsection 1 of NRS 363A.130 a credit in an amount equal to 50 percent of the sum of the commerce tax paid by the payroll provider and each member of the affiliated group that would have been liable for the tax imposed by NRS 363A.130 if the persons who provide services for that member were treated as employees of that member rather than as employees of the payroll provider.

5. As used in this section:

(a) “Affiliated group” means a group of two or more business entities, each of which is controlled by one or more common owners or by one or more members of the group.

(b) “Commerce tax” means the tax required to be paid pursuant to chapter 363C of NRS.

(c) “Controlled by” means the direct or indirect ownership, control or possession of 50 percent or more of the ownership interest in a business entity.

(d) “Payroll provider” means an employer who has been designated by the Department as a payroll provider pursuant to subsection 2.

(Added to NAC by Tax Comm’n by R123-15, eff. 6-28-2016)

NAC 363A.415 Employer ineligible to receive commerce tax credit if deficient in payment of commerce tax; amendment of tax return for payroll tax upon partial or full satisfaction of deficiency; adjustments to employer’s account. (NRS 360.090, 363A.070, 363A.130)

1. If an employer incurs a deficiency in the payment of the commerce tax, the employer is not entitled to the commerce tax credit for the amount of the deficiency until the employer satisfies all or part of the deficiency. The amount of the credit to which the employer is entitled pursuant to this subsection is equal to 50 percent of the amount of the deficiency paid by the employer.

2. Upon partial or full satisfaction of a deficiency in the payment of the commerce tax, an employer may amend a return of the tax imposed by NRS 363A.130 for any of the 4 calendar quarters immediately following the taxable year for which the commerce tax was required to be paid to claim the commerce tax credit in accordance with the provisions of subsection 4 of NRS 363A.130.

3. The Department may make such adjustments to the account of an employer as the Department deems necessary to apply a commerce tax credit and adjust a return of the tax imposed by NRS 363A.130 in accordance with this section.

4. As used in this section:

(a) “Commerce tax” means the tax required to be paid pursuant to chapter 363C of NRS.

(b) “Commerce tax credit” means the credit against the tax imposed by NRS 363A.130, which is set forth in subsection 4 of that section.

(Added to NAC by Tax Comm’n by R123-15, eff. 6-28-2016)

NAC 363A.420 Health care deduction: Depreciation of property by self-insured employer. (NRS 360.090, 363A.070, 363A.135) If a self-insured employer claims the depreciation of property as a direct administrative services cost for purposes of the health care deduction, the employer must compute that depreciation for each calendar quarter, beginning with the calendar quarter in which the property is first placed into service, according to a straight-line method which is based upon:

1. For tangible personal property other than a mobile home:

(a) Ninety-five percent of the cost of acquisition of the property; and

(b) A useful life determined in accordance with the Personal Property Manual adopted by the Commission for the period in which the property is first placed into service;

2. For a mobile home which has not been converted to real property:

(a) Eighty percent of the cost of acquisition of the mobile home; and

(b) A useful life of 15 years; and

3. For an improvement to real property:

(a) Seventy-five percent of the cost of acquisition of the improvement; and

(b) A useful life of 50 years.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

NAC 363A.430 Correction of errors in filed returns. (NRS 360.090, 363A.070, 363A.130) If an employer files a return pursuant to paragraph (a) of subsection 3 of NRS 363A.130 which contains any errors, the employer shall:

1. File with the Department an amended or adjusted return which corrects those errors. Any corrections to:

(a) The wages reported by the employer must be accompanied by an explanation of those corrections; and

(b) Any health care deduction claimed by the employer must be supported by appropriate documentation and explained to the satisfaction of the Department.

2. Remit to the Department any applicable amount due.

(Added to NAC by Tax Comm’n by R205-03, eff. 12-4-2003)

Credit for Matching Employee Contributions to Prepaid Tuition Contracts and College Savings Accounts

NAC 363A.500 “Prepaid tuition contract” defined. (NRS 363A.070, 363A.137) “Prepaid tuition contract” has the meaning ascribed to it in NRS 353B.030.

(Added to NAC by Tax Comm’n by R137-16, eff. 1-27-2017)

NAC 363A.505 “Qualified beneficiary” defined. (NRS 363A.070, 363A.137) “Qualified beneficiary” has the meaning ascribed to it in NRS 353B.050.

(Added to NAC by Tax Comm’n by R137-16, eff. 1-27-2017)

NAC 363A.510 Employer required to provide verification of matching contribution with quarterly return; submission of list of all matching contributions made on behalf of employees. (NRS 363A.070, 363A.137) An employer who, pursuant to NRS 363A.137, claims a credit against the excise tax imposed on the employer by NRS 363A.130 must include with the quarterly return filed by the employer pursuant to paragraph (a) of subsection 3 of NRS 363A.130:

1. Verification of a matching contribution made by the employer:

(a) To the savings trust account of an employee of the employer in the Nevada College Savings Trust Fund created by NRS 353B.340; or

(b) To the Nevada Higher Education Prepaid Trust Fund created by NRS 353B.140 to match a contribution made by an employee of the employer on behalf of a qualified beneficiary on whose behalf a prepaid tuition contract is drawn; and

2. A list of all matching contributions made on a form prescribed by the Department. The list must include, without limitation:

(a) The name and taxpayer identification number of the employer;

(b) The name of each employee for whom the matching contribution was made;

(d) The total amount of matching contributions made for each employee during the immediately preceding calendar year.

(Added to NAC by Tax Comm’n by R137-16, eff. 1-27-2017)

NAC 363A.515 Computation of annual limit of tax credit. (NRS 363A.070, 363A.137) The annual limit set forth in subsection 2 of NRS 363A.137 on the credit described in subsection 1 of that section must be computed based on a calendar year.

(Added to NAC by Tax Comm’n by R137-16, eff. 1-27-2017)