SB41 - Revises provisions relating to the taxation of cannabis establishments. (BDR 32-284)

- 83rd Session (2025) Senate Bill No. 41–Committee on Revenue and Economic Development CHAPTER.......... AN ACT relating to taxation; requiring a cannabis tax permit issued by the Department of Taxation to engage in or conduct the business of selling cannabis or cannabis products; providing for the issuance, revocation and suspension of a cannabis tax permit; requiring the suspension of a cannabis license under certain circumstances; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law imposes an excise tax on the wholesale and retail sale of cannabis by certain licensed cannabis establishments. (NRS 372A.290) Existing law also requires any person engaged in the business of selling at retail tangible personal property, including, without limitation, adult-use cannabis retail stores and cannabis consumption lounges, to register or file an application for a permit for each place of business from the Department of Taxation, which is referred to as a sales tax permit. (NRS 360.5971) Sections 3-5 of this bill define certain terms relating to the taxation of the sale of cannabis. Section 6 of this bill: (1) requires that, in addition to any other permit required by law, including, without limitation, a sales tax permit, every person who desires to engage in the sale of cannabis or cannabis products must, before obtaining a license from the Cannabis Compliance Board, apply for and obtain a cannabis tax permit issued by the Department for each place of business; and (2) establishes requirements for the application. Section 15 of this bill make this requirement applicable beginning on January 1, 2027, and section 14 of this bill establishes the manner in which persons engaging in the business of selling cannabis or cannabis products before that date are required to comply with the requirement to obtain a cannabis tax permit before that date. Section 7 of this bill requires the Department, not later than 15 days after receiving an application, to grant and issue to an applicant a separate cannabis tax permit for each place of business and provide the applicant with a full written explanation of the liability for the collection and payment of any applicable taxes. Section 7 also provides that a cannabis tax permit is not assignable and is only valid for the transaction of business at the place of business designated in the permit. Section 8 of this bill establishes procedures for the Department to revoke or suspend a cannabis tax permit for failure to comply with certain requirements relating to excise taxes imposed on the sale of cannabis and cannabis products. Specifically, section 8: (1) requires the Department to provide to the holder of a cannabis tax permit certain information concerning any alleged noncompliance, and an opportunity to cure such noncompliance, before issuing a notice of a hearing for the revocation or suspension of the cannabis tax permit; (2) authorizes the Department to, after notice and a hearing, revoke or suspend a cannabis tax permit for such noncompliance; (3) provides for an appeal to the Nevada Tax Commission; and (4) requires the Department to send a copy of a final decision to revoke or suspend a permit to the Board. Section 9 of this bill requires an aggrieved person to pay the amount of the tax liability, or to enter into an agreement to pay the liability, before the person may seek judicial review of a final decision of the Commission. – 2 – - 83rd Session (2025) Section 9.5 of this bill establishes provisions for a holder of a license issued by the Board who has requested to transfer the license to request and receive from the Department a certificate of the amount of any delinquent excise taxes, and the penalties and interest relating thereto. Sections 10-12 of this bill make conforming changes to: (1) indicate the proper placement of sections 2-9.5 in the Nevada Revised Statutes; and (2) clarify that certain provisions of existing law apply to sections 2-9.5. Existing law prohibits a person from engaging in business as a cannabis establishment, which includes the sale of cannabis or cannabis products, unless the person holds a license from the Board. (NRS 678B.210, 678B.250, 678B.530) Section 13 of this bill requires the Board, upon receipt of a copy of a final decision to revoke or suspend a cannabis tax permit or a sales and use tax permit, to suspend the corresponding cannabis license of the cannabis establishment until the excise tax liability is paid in full. 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 372A of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 9.5, inclusive, of this act. Sec. 2. As used in sections 2 to 9.5, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 2.5 to 5, inclusive, of this act have the meanings ascribed to them in those sections. Sec. 2.5. “Board” means the Cannabis Compliance Board. Sec. 3. “Business” includes any activity engaged in by any person or caused to be engaged in by any person with the object of gain, benefit or advantage, either direct or indirect. Sec. 4. “Person” includes any individual, firm, copartnership, joint venture, association, social club, fraternal organization, corporation, estate, trust, business trust, receiver, trustee, syndicate, cooperative, assignee or any other group or combination acting as a unit, but does not include the United States, this State or any agency thereof, or any city, county, district or other political subdivision of this State. Sec. 5. “Seller” includes every person who engages in the business of selling cannabis or cannabis products. As used in this section: 1. “Cannabis product” has the meaning ascribed to it in NRS 678A.120. 2. “Selling” has the meaning ascribed to “sale” in NRS 372A.040. – 3 – - 83rd Session (2025) Sec. 6. 1. In addition to any other permit required by law, before the issuance of a license by the Board pursuant to chapter 678B of NRS, every person desiring to engage in or conduct business as a seller within this State must, for each place of business: (a) Register with, or obtain a permit from, the Department pursuant to NRS 360.597 to 360.5975, inclusive; and (b) Obtain a cannabis tax permit from the Department issued pursuant to section 7 of this act. 2. Every application for a cannabis tax permit must: (a) Be made upon a form prescribed by the Department. (b) Set forth the name under which the applicant transacts or intends to transact business and the location of the applicant’s place or places of business. (c) Set forth any other information which the Department may require. (d) Be signed by: (1) The owner if he or she is a natural person; (2) A member or partner if the seller is an association or partnership; or (3) An executive officer or some person specifically authorized to sign the application if the seller is a corporation. Written evidence of the signer’s authority must be attached to the application. Sec. 7. 1. Except as otherwise provided in NRS 360.205 and section 8 of this act, after compliance with section 6 of this act by an applicant for a cannabis tax permit, the Department shall, not later than 15 days after receipt of the application: (a) Grant and issue to the applicant a separate cannabis tax permit for each place of business within the county. (b) Provide the applicant with a full written explanation of the liability of the applicant for the collection and payment of any applicable taxes imposed by this title. 2. A cannabis tax permit is not assignable and is valid only for the person in whose name it is issued and for the transaction of business at the place designated therein. A cannabis tax permit must at all times be conspicuously displayed at the place for which it is issued. Sec. 8. 1. Whenever any person fails to comply with any applicable provision of this title relating to the excise taxes imposed by this title or regulation of the Department relating to the excise taxes imposed by this title, the Department, after complying with the requirements of subsection 2 and providing a – 4 – - 83rd Session (2025) 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 cannabis tax permit should not be revoked or suspended, may revoke or suspend any one or more of the permits held by the person. A hearing required pursuant to this subsection must be conducted not later than 30 days after the person was given notice of the hearing, except that for good cause shown by the holder of the permit, the Department may continue the hearing for not more than 30 additional days. 2. Before giving notice of a hearing pursuant to subsection 1, the Department must send to the holder of the permit information clearly explaining the nature of the alleged noncompliance, the amount of any delinquent excise tax, and any penalty and interest relating thereto, and contact information that the holder of the permit may use to address questions concerning the alleged noncompliance. Except as otherwise provided in this subsection, if not later than 30 days after such information is sent to the holder of the permit, the holder of the permit pays the full amount of any delinquent excise tax, and penalty and interest relating thereto, or enters into a written agreement with the Department to pay such amount in installments over a period specified in the agreement, the Department must not give notice of a hearing pursuant to subsection 1. If the holder of the permit and the Department have approved a written agreement to pay the amount of any delinquent excise tax, and any penalty and interest relating thereto, in installments over a specified period of time, but the written agreement must be approved by the Nevada Tax Commission before becoming effective, the Department must present the written agreement to the Commission at its next public meeting and, if the Commission approves the written agreement, the Department must not give notice of a hearing pursuant to subsection 1. If the alleged noncompliance of the holder of the permit is a failure to comply with a written agreement with the Department to pay any delinquent excise tax, and penalty and interest relating thereto, the Department must send to the holder of the permit the information required by this subsection before giving notice of a hearing pursuant to subsection 1 and the Department may give notice of such a hearing if the holder of the permit does not cure the deficiency within 30 days after receiving information concerning the alleged noncompliance. 3. The Department shall, not later than 30 days after a hearing conducted pursuant to subsection 1, serve any decision – 5 – - 83rd Session (2025) regarding the suspension or revocation of a cannabis tax permit on the person in writing. If the holder of the permit does not file an appeal with the Nevada Tax Commission in accordance with subsection 6, the decision of the Department is final and not subject to judicial review. 4. The Department shall serve the decision required pursuant to subsection 3 by personal service or by certified mail, or, if the person provided consent to receiving electronic mail, in the manner prescribed for service of notice of a deficiency determination. 5. The Department shall not issue a new cannabis tax permit to any person who has previously had a permit revoked, unless the Department is satisfied that the person will comply with the provisions of this title relating to the excise taxes imposed by this title and the associated regulations of the Department. 6. Within 30 days after the date of service of a decision pursuant to subsection 3, a person who is aggrieved by the decision may file an appeal with the Nevada Tax Commission. The Commission shall consider the appeal at its next available public meeting. A decision of the Commission on appeal is a final decision for the purposes of judicial review pursuant to chapter 233B of NRS. Not later than 30 days after the public meeting at which the Commission considers the appeal, the Commission must issue a final decision in writing and serve the final written decision on the parties either personally or by certified mail. 7. If the final decision of the Department pursuant to subsection 3 or the Nevada Tax Commission pursuant to subsection 6, as applicable, supports revocation or suspension of the cannabis tax permit, the Department shall, not later than 5 days after issuance of the final decision, serve by certified mail or electronic means a copy of the final decision to the Board. 8. The Department shall, within 5 days after a person who is subject to a final decision pays the liability in full or the liability is transferred and paid in full with the proceeds from the transfer, reinstate the cannabis tax permit and provide the person a letter stating that the person has satisfied the arrearage and the cannabis tax permit has been reinstated. The Department shall also send a copy of that letter to the Board by certified mail or electronic means. 9. A seller who has received a notice of hearing pursuant to subsection 2 may continue to operate until such time as a copy of a final decision is sent to the Board pursuant to subsection 7. – 6 – - 83rd Session (2025) Sec. 9. 1. Before a person may seek judicial review pursuant to NRS 233B.130 from a final decision of the Nevada Tax Commission pursuant to this chapter, the person must: (a) Pay the amount of any outstanding liability as set forth in the final decision; or (b) Enter into a written agreement with the Department establishing a later date by which he or she must pay the amount of the outstanding tax liability. 2. If a court determines that the amount of any outstanding tax liability set forth in the final decision should be reduced or that the person does not owe any taxes, the Department shall credit or refund any amount paid by the person that exceeds the amount owed, with interest determined in accordance with NRS 360.2935. Sec. 9.5. If the holder of a license issued by the Board submits to the Board pursuant to NRS 678B.380 a request for a transfer of the license: 1. The holder of the license shall request in writing from the Department a cert [Text truncated for display. Full text available on LegiScan.]