Assembly Bill No. 535

Assembly Bill No. 535-Committee on Taxation

CHAPTER

304

AN ACT relating to taxation; providing a credit against the sales tax paid by a retailer on the uncollected portion of the sales price of a sale under certain circumstances; and providing other matters properly relating thereto.

[Approved July 5, 1997]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. NRS 372.365 is hereby amended to read as follows:
372.3651. For the purposes of the sales tax:
(a) The return must show the gross receipts of the seller during the preceding reporting period.
(b) The gross receipts must be segregated and reported separately for each county to which a sale of tangible personal property pertains.
(c) A sale pertains to the county in this state in which the tangible personal property is or will be delivered to the purchaser or his agent or designee.
2. For purposes of the use tax:
(a) In the case of a return filed by a retailer, the return must show the total sales price of the property [sold] purchased by him, the storage, use or consumption of which property became subject to the use tax during the preceding reporting period.
(b) The [gross receipts] sales price must be segregated and reported separately for each county to which a [sale] purchase of tangible personal property pertains.
(c) If the property was brought into this state by the purchaser or his agent or designee, the sale pertains to the county in this state in which the property is or will be first used, stored or otherwise consumed. Otherwise, the sale pertains to the county in this state in which the property was delivered to the purchaser or his agent or designee.
3. In case of a return filed by a purchaser, the return must show the total sales price of the property purchased by him, the storage, use or consumption of which became subject to the use tax during the preceding reporting period and indicate the county in this state in which the property was first used, stored or consumed.
4. The return must also show the amount of the taxes for the period covered by the return and such other information as the department deems necessary for the proper administration of this chapter.
5. If [during the period covered by the return:
(a) A retailer has not received a deferred payment due or is] a retailer:
(a) Is unable to collect all or part of the sales price of a sale, the amount of which [is] was included in the gross receipts [or total sales price reported or was so included] reported for a previous reporting period [, he may deduct] ; and
(b) Has taken a deduction on his federal income tax return pursuant to 26 U.S.C. § 166(a) for the amount which he is unable to collect,
he is entitled to receive a credit for the amount of sales [or use] tax paid [or payable] on account of that [deferred payment or] uncollected sales price . [from the amount of sales or use tax otherwise payable for the current reporting period.
(b) A] The credit may be used against the amount of sales tax that the retailer is subsequently required to pay pursuant to this chapter.
6. If the Internal Revenue Service of the Department of the Treasury disallows a deduction described in paragraph (b) of subsection 5 and the retailer claimed a credit on a return for a previous reporting period pursuant to subsection 5, the retailer shall include the amount of that credit in the amount of taxes reported pursuant to subsection 4 in the first return filed with the department after the deduction is disallowed.
7. If a retailer collects all or part of [any deferred payment or uncollected] the sales price for which he claimed a [deduction] credit on a return for a previous reporting period pursuant to [paragraph (a), he shall add to the amount of sales or use tax otherwise payable for the current reporting period the amount he deducted on the return for the previous reporting period on account of the portion of that deferred payment or uncollected sales price which he collected during the current reporting period.
6.] subsection 5, he shall include:
(a) The amount collected in the gross receipts reported pursuant to paragraph (a) of subsection 1; and
(b) The sales tax payable on the amount collected in the amount of taxes reported pursuant to subsection 4,
in the first return filed with the department after that collection.
8. Except as otherwise provided in subsection [7,] 9, upon determining that a retailer has filed a return which contains one or more violations of the provisions of this section, the department shall:
(a) For the first return of any retailer which contains one or more violations, issue a letter of warning to the retailer which provides an explanation of the violation or violations contained in the return.
(b) For the first or second return, other than a return described in paragraph (a), in any calendar year which contains one or more violations, assess a penalty equal to the amount of the tax which was not reported or was reported for the wrong county or $1,000, whichever is less.
(c) For the third and each subsequent return in any calendar year which contains one or more violations, assess a penalty of three times the amount of the tax which was not reported or was reported for the wrong county or $3,000, whichever is less.
[7.] 9. For the purposes of subsection [6,] 8, if the first violation of this section by any retailer was determined by the department through an audit which covered more than one return of the retailer, the department shall treat all returns which were determined through the same audit to contain a violation or violations in the manner provided in paragraph (a) of subsection [6.] 8.
Sec. 2. NRS 374.370 is hereby amended to read as follows:
374.3701. For the purposes of the sales tax:
(a) The return must show the gross receipts of the seller during the preceding reporting period.
(b) The gross receipts must be segregated and reported separately for each county to which a sale of tangible personal property pertains.
(c) A sale pertains to the county in this state in which the tangible personal property is or will be delivered to the purchaser or his agent or designee.
2. For purposes of the use tax:
(a) In the case of a return filed by a retailer, the return must show the total sales price of the property [sold] purchased by him, the storage, use or consumption of which property became subject to the use tax during the preceding reporting period.
(b) The [gross receipts] sales price must be segregated and reported separately for each county to which a [sale] purchase of tangible personal property pertains.
(c) If the property was brought into this state by the purchaser or his agent or designee, the sale pertains to the county in this state in which the property is or will be first used, stored or otherwise consumed. Otherwise, the sale pertains to the county in this state in which the property was delivered to the purchaser or his agent or designee.
3. In case of a return filed by a purchaser, the return must show the total sales price of the property purchased by him, the storage, use or consumption of which became subject to the use tax during the preceding reporting period and indicate the county in this state in which the property was first used, stored or consumed.
4. The return must also show the amount of the taxes for the period covered by the return and such other information as the department deems necessary for the proper administration of this chapter.
5. If [during the period covered by the return:
(a) A retailer has not received a deferred payment due or is] a retailer:
(a) Is unable to collect all or part of the sales price of a sale, the amount of which [is] was included in the gross receipts [or total sales price reported or was so included] reported for a previous reporting period [, he may deduct] ; and
(b) Has taken a deduction on his federal income tax return pursuant to 26 U.S.C. § 166(a) for the amount which he is unable to collect,
he is entitled to receive a credit for the amount of sales [or use] tax paid [or payable] on account of that [deferred payment or] uncollected sales price . [from the amount of sales or use tax otherwise payable for the current reporting period.
(b) A] The credit may be used against the amount of sales tax that the retailer is subsequently required to pay pursuant to this chapter.
6. If the Internal Revenue Service of the Department of the Treasury disallows a deduction described in paragraph (b) of subsection 5 and the retailer claimed a credit on a return for a previous reporting period pursuant to subsection 5, the retailer shall include the amount of that credit in the amount of taxes reported pursuant to subsection 4 in the first return filed with the department after the deduction is disallowed.
7. If a retailer collects all or part of [any deferred payment or uncollected] the sales price for which he claimed a [deduction] credit on a return for a previous reporting period pursuant to [paragraph (a), he shall add to the amount of sales or use tax otherwise payable for the current reporting period the amount he deducted on the return for the previous reporting period on account of the portion of that deferred payment or uncollected sales price which he collected during the current reporting period.
6.] subsection 5, he shall include:
(a) The amount collected in the gross receipts reported pursuant to paragraph (a) of subsection 1; and
(b) The sales tax payable on the amount collected in the amount of taxes reported pursuant to subsection 4,
in the first return filed with the department after that collection.
8. Except as otherwise provided in subsection [7,] 9, upon determining that a retailer has filed a return which contains one or more violations of the provisions of this section, the department shall:
(a) For the first return of any retailer which contains one or more violations, issue a letter of warning to the retailer which provides an explanation of the violation or violations contained in the return.
(b) For the first or second return, other than a return described in paragraph (a), in any calendar year which contains one or more violations, assess a penalty equal to the amount of the tax which was not reported or was reported for the wrong county or $1,000, whichever is less.
(c) For the third and each subsequent return in any calendar year which contains one or more violations, assess a penalty of three times the amount of the tax which was not reported or was reported for the wrong county or $3,000, whichever is less.
[7.] 9. For the purposes of subsection [6,] 8, if the first violation of this section by any retailer was determined by the department through an audit which covered more than one return of the retailer, the department shall treat all returns which were determined through the same audit to contain a violation or violations in the manner provided in paragraph (a) of subsection [6.] 8.
Sec. 3. The amendatory provisions of this act do not authorize any credits against the sales taxes owed on account of sales and purchases that occurred before July 1, 1997.
Sec. 4. 1. This section and section 3 of this act become effective on July 1, 1997.
2. Sections 1 and 2 of this act become effective at 12:01 a.m. on July 1, 1997.
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