[Rev. 12/2/2022 3:26:18 PM]
[NAC-372A Revised Date: 11-22]
CHAPTER 372A - TAX ON CONTROLLED SUBSTANCES
GENERAL PROVISIONS
372A.010 Effect of criminal proceeding on collection of tax.
372A.020 Use of revenue stamps; applicability.
EXCISE TAX ON CANNABIS
372A.100 Definitions.
372A.102 “Batch” defined.
372A.104 “Cannabis” defined.
372A.105 “Cannabis cultivation facility” defined.
372A.106 “Cannabis establishment” defined.
372A.107 “Cannabis product” defined.
372A.109 “Department” defined.
372A.110 “Excise tax on cannabis” defined.
372A.112 “Extraction” defined.
372A.115 “Fair market value” defined.
372A.118 “Lot” defined.
372A.140 “Taxpayer” defined.
372A.155 Method for calculating fair market value at wholesale for various categories of cannabis.
372A.160 Payment of tax; monthly return; supporting documentation; submission of financial statement upon request of Department.
GENERAL PROVISIONS
NAC 372A.010 Effect of criminal proceeding on collection of tax. (NRS 372A.050)
1. An action brought to recover any tax, fee or civil penalty imposed pursuant to chapter 372A of NRS is not barred by a prior acquittal of the defendant in a criminal action arising out of the same transaction or occurrence.
2. The Department may postpone an administrative hearing contesting the assessment of a tax, fee or civil penalty imposed pursuant to chapter 372A of NRS if a criminal prosecution of the defendant arising out of the same transaction or occurrence is pending.
3. In a civil proceeding brought pursuant to chapter 372A of NRS, the doctrine of collateral estoppel may bar the relitigation of an issue determined in a previous criminal proceeding in which the party sought to be estopped had a full and fair opportunity to litigate that issue.
(Added to NAC by Dep’t of Taxation, eff. 6-20-90)
NAC 372A.020 Use of revenue stamps; applicability. (NRS 360.090, 372A.050)
1. Each dealer in controlled substances who purchases revenue stamps from the Department pursuant to NRS 372A.090 shall affix the stamps to each package, packet or container of a controlled substance he or she sells.
2. This section does not apply to any sale that is subject to an excise tax imposed by NRS 372A.290.
(Added to NAC by Dep’t of Taxation, eff. 9-19-90; A by Tax Comm’n by R073-13, 6-23-2014; R108-20, 4-11-2022)
EXCISE TAX ON CANNABIS
NAC 372A.100 Definitions. (NRS 360.090, 372A.050, 372A.290, 678B.640) As used in NAC 372A.100 to 372A.160, inclusive, unless the context otherwise requires, the words and terms defined in NAC 372A.102 to 372A.140, inclusive, have the meanings ascribed to them in those sections.
(Added to NAC by Tax Comm’n by R073-13, eff. 6-23-2014; A by R108-20, 4-11-2022)
NAC 372A.102 “Batch” defined. (NRS 360.090, 372A.050, 678B.640) “Batch” means the usable flower and trim contained within one or more specific lots of cannabis grown by a cannabis cultivation facility from one or more seeds or cuttings of the same strain of cannabis and harvested on or before a specified final date of harvest.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.104 “Cannabis” defined. (NRS 360.090, 372A.050, 678B.640) “Cannabis” has the meaning ascribed to it in NRS 372A.015.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.105 “Cannabis cultivation facility” defined. (NRS 360.090, 372A.050, 678B.640) “Cannabis cultivation facility” has the meaning ascribed to it in NRS 372A.210.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.106 “Cannabis establishment” defined. (NRS 360.090, 372A.050, 678B.640) “Cannabis establishment” has the meaning ascribed to it in NRS 678A.095.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.107 “Cannabis product” defined. (NRS 360.090, 372A.050, 678B.640) “Cannabis product” has the meaning ascribed to it in NRS 372A.290.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.109 “Department” defined. (NRS 360.090, 372A.050, 678B.640) “Department” means the Department of Taxation.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.110 “Excise tax on cannabis” defined. (NRS 360.090, 372A.050, 372A.290) “Excise tax on cannabis” has the meaning ascribed to it in NRS 372A.220.
(Added to NAC by Tax Comm’n by R073-13, eff. 6-23-2014; A by R108-20, 4-11-2022)
NAC 372A.112 “Extraction” defined. (NRS 360.090, 372A.050, 678B.640) “Extraction” has the meaning ascribed to it in NRS 453.0825.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.115 “Fair market value” defined. (NRS 360.090, 372A.050, 678B.640) “Fair market value” means the value established by the Department based on the price that a buyer would pay to a seller in an arm’s length transaction for cannabis in the wholesale market.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.118 “Lot” defined. (NRS 360.090, 372A.050, 678B.640) “Lot” means:
1. The flowers from one or more cannabis plants of the same batch, in a quantity that weighs 5 pounds or less;
2. The leaves or other plant matter from one or more cannabis plants of the same batch, other than full female flowers, in a quantity that weighs 15 pounds or less; or
3. The wet leaves or other plant matter from one or more cannabis plants of the same batch used only for extraction, in a quantity that weighs 125 pounds or less within 2 hours of harvest.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.140 “Taxpayer” defined. (NRS 360.090, 372A.050, 372A.290) “Taxpayer” has the meaning ascribed to it in NRS 372A.250.
(Added to NAC by Tax Comm’n by R073-13, eff. 6-23-2014; A by R108-20, 4-11-2022)
NAC 372A.155 Method for calculating fair market value at wholesale for various categories of cannabis. (NRS 360.090, 372A.050, 678B.640) The Department will calculate the fair market value at wholesale using the reported sales or transfer of cannabis in each category of cannabis described in this section using the methodology described in subsections 1 to 6, inclusive. The fair market value at wholesale of:
1. Cannabis bud must be calculated on the basis of the total weight of all cannabis bud that is sold, excluding the inadvertent inclusion of an inconsequential amount of cannabis bud in a sale of cannabis trim.
2. Cannabis trim must be calculated on the basis of the total weight of all cannabis trim that is sold, including the total weight of an inconsequential amount of cannabis bud which is inadvertently included.
3. Immature cannabis plants must be calculated on the basis of the total number of immature cannabis plants sold.
4. Whole wet cannabis plants must be calculated on the basis of the total weight of the entire whole wet cannabis plant. A cannabis cultivation facility shall maintain records of the time each batch containing whole wet cannabis plants is harvested and weighed which contain the weight of each plant, are in writing and are created contemporaneously with the harvesting and weighing. To determine the total weight of the whole wet cannabis plant:
(a) The plant must not undergo any further processing, including, without limitation, drying the plant and subsequently selling separately the cannabis bud and cannabis trim from the plant, before being weighed; and
(b) The plant must be weighed within 2 hours after the harvesting of the batch containing the plant and without any further processing of the plant, including, without limitation, increasing the ambient temperature of the room in which the plant is held or drying, curing or trimming the plant. If the whole wet cannabis plant is not weighed within 2 hours after the harvest of the batch containing the plant or is subjected to further processing, the fair market value at wholesale of the plant must not be calculated using this subsection and must be calculated using subsection 1 or 2.
5. Cannabis seeds must be calculated on the basis of the total number of seeds sold.
6. Any other category of cannabis must be determined by the Department on a case-by-case basis.
(Added to NAC by Tax Comm’n by R108-20, eff. 4-11-2022)
NAC 372A.160 Payment of tax; monthly return; supporting documentation; submission of financial statement upon request of Department. (NRS 360.090, 372A.050, 372A.290)
1. Each taxpayer shall, on or before the last day of the month immediately following each month for which the taxpayer is subject to the imposition of the excise tax on cannabis, file with the Department a return on a form prescribed by the Department and remit to the Department any tax due for the month covered by the return. Each taxpayer shall file a return even if the taxpayer has no liability for the tax.
2. Each taxpayer shall pay the excise tax on cannabis to the Department upon the first sale of cannabis or cannabis products to a cannabis establishment or consumer.
3. If a cannabis cultivation facility sells cannabis to another cannabis cultivation facility and pays to the Department the excise tax imposed by subsection 1 or 2 of NRS 372A.290, as applicable, the excise tax imposed by subsection 1 or 2 of NRS 372A.290 is not required for any subsequent wholesale sale of that cannabis.
4. Each taxpayer shall keep all supporting documentation for verification that the excise tax imposed by subsection 1 or 2 of NRS 372A.290 was paid on the first wholesale sale of cannabis.
5. The Department may require a cannabis establishment to submit a financial statement as determined to be necessary by the Department to ensure the collection of any taxes which may be owed by the cannabis establishment.
(Added to NAC by Tax Comm’n by R073-13, eff. 6-23-2014; A by R108-20, 4-11-2022)