AB594 - Revises provisions relating to taxation. (BDR 32-1130)

- 83rd Session (2025) Assembly Bill No. 594–Committee on Ways and Means CHAPTER.......... AN ACT relating to taxation; authorizing the Department of Taxation to deliver by electronic means notices, decisions and other written communications under certain circumstances; authorizing the Board of Economic Development to deny an application for an abatement, partial abatement or transferable tax credits under certain circumstances; revising the manner in which the Department determines the industry in which a business is engaged for the purposes of the commerce tax; revising the due date for the payment of sales and use taxes; authorizing businesses that recycle certain materials or produce certain fuels from recycled materials to apply to the Office of Economic Development for a partial abatement of certain taxes; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Section 1.3 of this bill authorizes the Department of Taxation to deliver by electronic means any notice, decision or other written communication that the Department is required to provide to a person under existing law, unless: (1) the person has opted out of receiving such notices, decisions or written communications by electronic means; or (2) another provision of law specifies the means by which the Department is required to send such a notice, decision or written communication. Under section 1.3, the electronic means by which the Department may send notices, decisions and other written communications are: (1) delivery to a secure account of a person who has registered for an account with an electronic system maintained by the Department; (2) delivery to an electronic mail address at which a person has agreed to receive notices, decisions and other written communications from the Department; and (3) posting a notice, decision or other written communication on an electronic network or Internet website maintained by the Department that is accessible to a person via the Internet or a mobile application and delivering a separate notice of such posting to the electronic mail address of the person. Sections 2 and 3 of this bill clarify that the Department is required to continue to provide notice by personal service or by mail of determinations of deficiency in the payment of taxes or the suspension or revocation of certain permits issued by the Department. (NRS 360.350, 360.5975) Existing law authorizes the Office of Economic Development to approve transferable tax credits and abatements or partial abatements of certain property taxes, business taxes and sales and use taxes for certain businesses in certain circumstances. (NRS 231.1555, 274.310, 274.320, 274.330, 360.750, 360.753, 360.754, 360.759, 360.889, 360.945) Section 1.5 of this bill authorizes the Board of Economic Development to deny, or approve for a lesser amount, an application for an abatement, partial abatement or transferable tax credits if the Board determines that approving the full amount applied for is not in the best interests of the State. Section 1.5 lists certain factors that the Board may consider in determining whether granting the full amount applied for is in the best interests of the State. – 2 – - 83rd Session (2025) Existing law authorizes the Office to approve a partial abatement from the taxes imposed on real property for a business that: (1) engages in the primary trade of preparing, fabricating, manufacturing or otherwise processing raw material or an intermediate product using a certain percentage of recycled materials or includes as a primary component a facility for the generation of electricity from recycled material; and (2) has as its primary purpose the conservation of energy or the substitution of other sources of energy for fossil fuel sources of energy. (NRS 701A.210) Section 7.5 of this bill authorizes the Office to grant such a partial abatement of property taxes to a business that: (1) includes as a primary component a facility for the production of biofuels, biomass or other primary fuels from recycled material to produce energy; or (2) primarily engages in the recycling or repurposing of materials that were used to produce or store renewable energy, including, without limitation, materials used in solar panels or waste materials resulting from the extraction of minerals. Existing law imposes a commerce tax on the Nevada gross revenue of certain business entities whose Nevada gross revenue exceeds $4,000,000 in a taxable year, at a rate that is based on the industry in which a business entity is engaged. (Chapter 363C of NRS) Section 13 of this bill repeals the provision of existing law that provides that for the purpose of determining the commerce tax rate of a business entity, the industry in which a business entity is engaged is determined based on the 2012 edition of the North American Industry Classification System (“NAICS”) published by the Bureau of the Census of the United States Department of Commerce. (NRS 363C.060) Section 4 of this bill instead provides that the industry in which a business entity is engaged is determined based on the most recent edition of the NAICS. Section 5 of this bill updates certain NAICS codes in the publishing, software and data processing business categories to reflect the 2022 version of the NAICS, which is the most recent version published by the Bureau of the Census. (NRS 363C.430) Section 14 of this bill provides that the changes made by sections 4, 5 and 13 apply only to taxable years commencing on or after July 1, 2025, thereby prohibiting retroactive application of the changes made by those sections to previous taxable years. Under existing law, with certain exceptions, a person required to pay sales or use tax is required to remit such taxes to the Department on or before the last day of the month after the tax was imposed. (NRS 372.355, 374.360) Sections 6 and 7 of this bill revise the due date for remitting such taxes by requiring sales or use tax to be remitted to the Department on or before the 20th day of the month after the tax was imposed. Sections 14 and 15 of this bill provide that the change to the due date for remitting sales and use taxes to the Department applies only to a taxable period beginning on or after January 1, 2026, thereby prohibiting retroactive application of the change to such due date to taxable periods beginning before January 1, 2026. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 360 of NRS is hereby amended by adding thereto the provisions set forth as sections 1.3 and 1.5 of this act. Sec. 1.3. 1. Except as otherwise provided by specific statute, the Department may deliver by electronic means any notice, – 3 – - 83rd Session (2025) decision or other written communication which the Department is required to provide to a person pursuant to this title if the notice, decision or other written communication delivered by the Department through electronic means contains or is accompanied by information from which the person can determine the date on which the Department sent the notice, decision or other written communication. 2. The Department shall allow a person, at any time, to opt out of receiving notices, decisions and written communications from the Department through electronic means. Except as otherwise provided by specific statute, if a person opts out of receiving such notices, decisions and written communications through electronic means, the Department shall send such notices, decisions and written communications by mail addressed to the person at his or her address as it appears in the records of the Department. 3. As used in this section, “deliver by electronic means” means: (a) To deliver to the secure account of a person who has registered for an account with an electronic system maintained by the Department; (b) To deliver to an electronic mail address at which a person has agreed to receive notices, decisions and other written communications from the Department; or (c) To post a notice, decision or other written communication on an electronic network or Internet website maintained by the Department that is accessible via the Internet or a mobile application or by using a computer, mobile device, tablet or any other electronic device and to deliver a separate notice of the posting of the notice, decision or other written communication to the electronic mail address of the person described in paragraph (b). Sec. 1.5. 1. Notwithstanding any other provisions of law, if the Board of Economic Development determines, with respect to an application for an abatement or partial abatement of taxes or for transferable tax credits which is reviewed by the Board, that granting the full amount of the abatement, partial abatement or transferable tax credits requested or to which the applicant would otherwise be entitled is not in the best interests of the State, the Board must: (a) Deny the application; or – 4 – - 83rd Session (2025) (b) Approve the application but for a lesser amount, or otherwise place conditions on the approval of the abatement, partial abatement or transferable tax credits. 2. In determining whether granting the full amount of an abatement, partial abatement or transferable tax credits is in the best interests of the State for the purposes of subsection 1, the Board of Economic Development may consider the following factors, with respect to the business that is the subject of the application: (a) The projected water consumption of the business, particularly if the business is or will be located in a region with limited water resources, with the goal of promoting the sustainable use of the water supplies in this State. (b) The alignment of the business with the social objectives of the State, including, without limitation, the promotion of equity, education and community well-being. (c) The potential environmental impact of the business, including, without limitation, the likelihood of a significant adverse effect on air quality, water quality or local ecosystems. (d) The alignment of the business with the economic objectives of the State, including, without limitation, the creation of jobs, the diversification of the economy of the State and the long-term economic development of the State. (e) The anticipated impact of the business on local communities, including, without limitation, the impact on traffic, infrastructure and community resources. (f) The financial stability and viability of the business, including, without limitation, signs of financial instability that may pose a risk to state investments. 3. The Board of Economic Development may consider the factors listed in subsection 2 with respect to any other decision which the Board is authorized to make with respect to an application for an abatement, partial abatement or transferable tax credits, including, without limitation, the duration of the abatement, partial abatement or transferable tax credits. Sec. 2. NRS 360.350 is hereby amended to read as follows: 360.350 1. The Department shall give a person against whom a determination has been made written notice of its determination [.] in accordance with subsection 2. 2. The notice may be served personally or by mail. If served by mail, the notice must be addressed to the person at his or her address as it appears in the records of the Department. – 5 – - 83rd Session (2025) 3. If notice is served by mail, service is complete at the time of deposit with the United States Postal Service. 4. Service of notice tolls any limitation for the determination of a further deficiency. Sec. 3. NRS 360.5975 is hereby amended to read as follows: 360.5975 1. Whenever any person fails to comply with any provision of chapter 372, 374 or 377 of NRS relating to the taxes imposed by those chapters or any regulation of the Department relating to the taxes imposed by chapters 372, 374 and 377 of NRS, the Department, after a hearing of which the person was given prior notice of at least 10 days in writing specifying the time and place of the hearing and requiring the person to show cause as to why his or her permit or permits should not be revoked or suspended, may revoke or suspend any one or more of the permits held by the person. 2. The Department shall give to the person written notice of the suspension or revocation of any of his or her permits [.] in accordance with subsection 3. 3. The notices may be served personally or by mail in the manner prescribed for service of notice of a deficiency determination. 4. The Department shall not issue a new permit after the revocation of a permit unless it is satisfied that the former holder of the permit will comply with the provisions of chapters 372, 374 and 377 of NRS relating to the taxes imposed by those chapters and the regulations of the Department. Sec. 4. Chapter 363C of NRS is hereby amended by adding thereto a new section to read as follows: 1. Except as otherwise provided in this section and unless the context otherwise requires, for the purposes of this chapter, references to the “North American Industry Classification System” or “NAICS” are to the most recent edition of the North American Industry Classification System published by the Bureau of the Census of the United States Department of Commerce. 2. The Department shall review each new edition of the North American Industry Classification System published by the Bureau of the Census of the United States Department of Commerce after July 1, 2025. If the Department determines that the adoption of the new edition would cause a business entity to be categorized in a different business category set forth in NRS 363C.310 to 363C.550, inclusive, or would cause a business entity categorized in the unclassified business category pursuant to NRS 363C.560 to – 6 – - 83rd Session (2025) be categorized in a business category set forth in NRS 363C.310 to 363C.550, inclusive: (a) The Department shall notify the Office of Finance and the Fiscal Analysis Division of the Legislative Counsel Bureau; and (b) The new edition of the North American Industry Classification System must not become effective unless legislation adopting the new edition is enacted by the Legislature and approved by the Governor. Sec. 5. NRS 363C.430 is hereby amended to read as follows: 363C.430 1. The publishing, software and data processing business category (NAICS [511,] 512, [515] [Text truncated for display. Full text available on LegiScan.]