The Nevada Tax Commission plans to extend the grace period for another six months for businesses to comply with new laws requiring they register and be licensed by the state.
The deadline to register and pay a $100 annual license fee is today. Taxation Director Chuck Chinnock said the board intends to allow the penalty for not doing so to be waived "for good cause" through the end of December.
"We've been pretty good about notifying people," he said. "But if they have good cause and can show they weren't notified, we can waive the $100 reinstatement fee and any penalties and interest."
The licensing requirement was enacted by the 2003 Nevada Legislature not only as a revenue generator but a way of identifying, for the first time, all the businesses operating in the state of Nevada. Once identified, they could then be assessed the new state payroll-based "modified business tax."
While the license fee was projected to bring in about $22 million a year, the modified business tax and the companion tax on financial institutions were projected to raise a combined total of more than $228 million a year once up and running.
Chinnock said his department's estimate to lawmakers there may be up to 150,000 businesses in the state has turned out to be far too conservative.
He said between 100,000 and 120,000 have registered with the Taxation Department and that the department is discovering more businesses as they begin to sort through lists ranging from the Secretary of State's Office to Internal Revenue Service.
"Now we know there are a lot more out there - probably about 300,000," he said. "But some of those may be home-based businesses that don't have to pay the business license fee."
Home-based businesses which generate less than $22,000 a year in new earnings are exempt.
But, for example, a hairdresser who rents space in a salon and operates as an independent contractor is not exempt and must pay the $100-a-year license.
However, Chinnock said many small businesses may not owe any tax.
"When we find a business, we're now going to individually notify people," he said. "We have no other choice but to do that."
Those who receive notification letters will be asked to show whether they meet the criteria for an exemption.
"They can call us or go to our Web site (www.tax.state.nv.us)," he said. "We have a team of people here ready to answer those questions."
Exemptions to today's deadline won't be automatic, he said. Those who have no excuse will have to pay a $100 reinstatement fee, their new $100 license fee for the year, pay any back payroll taxes owed plus a 10-percent penalty and 1 percent interest per month.
On the Net
Nevada Department of Taxation:
Contact Geoff Dornan at firstname.lastname@example.org or 687-8750.