SB269 - Provides a credit against the modified business tax for certain donations to support graduate medical education. (BDR 32-578)

S.B. 269 - *SB269* SENATE BILL NO. 269–SENATOR TITUS MARCH 4, 2025 ____________ Referred to Committee on Revenue and Economic Development SUMMARY—Provides a credit against the modified business tax for certain donations to support graduate medical education. (BDR 32-578) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to taxation; establishing a credit against the modified business tax for taxpayers who donate money to the Graduate Medical Education Grant Program established and administered by the Office of Science, Innovation and Technology within the Office of the Governor; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Under existing law, financial institutions, certain mining businesses and other 1 employers are required to pay an excise tax (the modified business tax) on wages 2 paid by them. (NRS 363A.130, 363B.110) Existing law establishes the Graduate 3 Medical Education Grant Program, which is administered by the Office of Science, 4 Innovation and Technology within the Office of the Governor, for the purpose of 5 awarding grants to institutions seeking to create, expand or retain accredited 6 programs for residency training and postdoctoral fellowships for physicians. (NRS 7 223.631-226.639) 8 Sections 1-4 of this bill establish a credit against the modified business tax 9 equal to an amount which is approved by the Office and which must not exceed the 10 amount of any donation of money made by a taxpayer to the Program. Under 11 sections 1 and 3, the total credits authorized and approved by the Office for Fiscal 12 Year 2025-2026 must not exceed $4,000,000, and this limit is increased each year 13 by 3 percent of the amount authorized for the previous fiscal year. Finally, sections 14 1 and 3: (1) require a taxpayer who wishes to receive any credits authorized by 15 sections 1 and 3 to apply to the Office for the credits authorized; (2) require the 16 Office to approve or deny such applications in the order in which they are received; 17 (3) require the Office to notify the Department of Taxation of the approval of an 18 application of any credits authorized by sections 1 and 3, the issuance of such 19 – 2 – - *SB269* credits and any forfeiture of such credits; and (4) authorizes a taxpayer who is 20 issued an amount of credits that exceed the amount of tax due from the taxpayer to 21 carry the excess credits forward for not more than 5 years after the end of the 22 calendar year in which the taxpayer made the donation to the Program or until the 23 entire amount of credits have been applied, whichever is earlier. 24 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 363A of NRS is hereby amended by 1 adding thereto a new section to read as follows: 2 1. Any taxpayer who is required to pay a tax pursuant to NRS 3 363A.130 may receive a credit against the tax otherwise due for 4 any donation of money made by the taxpayer to the Graduate 5 Medical Education Grant Program established by NRS 223.637 in 6 the manner provided by this section. 7 2. To receive the credit authorized by subsection 1, a taxpayer 8 who intends to make a donation of money to the Graduate Medical 9 Education Grant Program shall, before making such a donation, 10 apply to the Office of Science, Innovation and Technology for 11 approval of the credit authorized by subsection 1 for the donation. 12 The Office shall, within 20 days after receiving the application, 13 approve or deny the application and provide to the taxpayer notice 14 of the decision and, if the application is approved, the amount of 15 the credit authorized. Upon receipt of notice that the application 16 has been approved, the taxpayer must, not later than 30 days after 17 receiving the notice, make the donation of money to the Program. 18 Upon receipt of the donation, the Office shall issue a certificate of 19 the credit authorized by subsection 1. If the taxpayer does not 20 make the donation of money to the Program within 30 days after 21 receiving the notice, the taxpayer forfeits any claim to the credit 22 authorized by subsection 1. The Office shall notify the Department 23 of Taxation of each application approved pursuant to this 24 subsection, the issuance of each certificate of the credit authorized 25 by subsection 1 and the forfeiture of any claim to a credit 26 authorized by subsection 1. 27 3. The Office of Science, Innovation and Technology shall 28 approve or deny applications for the credit authorized by 29 subsection 1 in the order in which the applications are received. 30 4. The Office of Science, Innovation and Technology may, 31 for each fiscal year, approve applications for the credit authorized 32 by subsection 1 until the total amount of the credits authorized by 33 subsection 1 and approved by the Office pursuant to this 34 subsection and subsection 4 of section 3 of this act is: 35 (a) For Fiscal Year 2025-2026, $4,000,000; 36 – 3 – - *SB269* (b) For Fiscal Year 2026-2027, $4,120,000; and 1 (c) For each subsequent fiscal year, an amount equal to 103 2 percent of the amount authorized for the immediately preceding 3 fiscal year. 4  The amount of any credit which is forfeited pursuant to 5 subsection 2 must not be considered in calculating the amount of 6 credits authorized for any fiscal year. 7 5. If a taxpayer applies to and is approved by the Office of 8 Science, Innovation and Technology for the credit authorized by 9 subsection 1, the amount of the credit provided by this section is 10 equal to the amount approved by the Office pursuant to subsection 11 2, which must not exceed the amount of the donation made by the 12 taxpayer to the Graduate Medical Education Grant Program. The 13 total amount of the credit applied against the taxes described in 14 subsection 1 and otherwise due from a taxpayer must not exceed 15 the amount of the donation. 16 6. If the amount of the tax described in subsection 1 and 17 otherwise due from a taxpayer is less than the credit to which the 18 taxpayer is entitled pursuant to this section, the taxpayer may, 19 after applying the credit to the extent of the tax otherwise due, 20 carry the balance of the credit forward for not more than 5 years 21 after the end of the calendar year in which the donation is made 22 or until the balance of the credit is applied, whichever is earlier. 23 Sec. 2. NRS 363A.130 is hereby amended to read as follows: 24 363A.130 1. Except as otherwise provided in NRS 360.203, 25 there is hereby imposed an excise tax on each employer at the rate 26 of 2 percent of the wages, as defined in NRS 612.190, paid by the 27 employer during a calendar quarter with respect to employment in 28 connection with the business activities of the employer. 29 2. The tax imposed by this section: 30 (a) Does not apply to any person or other entity or any wages 31 this State is prohibited from taxing under the Constitution, laws or 32 treaties of the United States or the Nevada Constitution. 33 (b) Must not be deducted, in whole or in part, from any wages of 34 persons in the employment of the employer. 35 3. Each employer shall, on or before the last day of the month 36 immediately following each calendar quarter for which the 37 employer is required to pay a contribution pursuant to 38 NRS 612.535: 39 (a) File with the Department a return on a form prescribed by 40 the Department; and 41 (b) Remit to the Department any tax due pursuant to this section 42 for that calendar quarter. 43 4. In determining the amount of the tax due pursuant to this 44 section, an employer is entitled to subtract from the amount 45 – 4 – - *SB269* calculated pursuant to subsection 1 a credit in an amount equal to 50 1 percent of the amount of the commerce tax paid by the employer 2 pursuant to chapter 363C of NRS for the preceding taxable year. 3 The credit may only be used for any of the 4 calendar quarters 4 immediately following the end of the taxable year for which the 5 commerce tax was paid. The amount of credit used for a calendar 6 quarter may not exceed the amount calculated pursuant to 7 subsection 1 for that calendar quarter. Any unused credit may not be 8 carried forward beyond the fourth calendar quarter immediately 9 following the end of the taxable year for which the commerce tax 10 was paid, and a taxpayer is not entitled to a refund of any unused 11 credit. 12 5. An employer who makes a donation of money to a 13 scholarship organization during the calendar quarter for which a 14 return is filed pursuant to this section is entitled, in accordance with 15 NRS 363A.139, to a credit equal to the amount authorized pursuant 16 to NRS 363A.139 against any tax otherwise due pursuant to this 17 section. As used in this subsection, “scholarship organization” has 18 the meaning ascribed to it in NRS 388D.260. 19 6. An employer who makes a donation of money to the 20 Graduate Medical Education Grant Program established by NRS 21 223.637 during the calendar quarter for which a return is filed 22 pursuant to this section is entitled, in accordance with section 1 of 23 this act, to a credit equal to the amount authorized pursuant to 24 section 1 of this act against any tax otherwise due pursuant to this 25 section. 26 Sec. 3. Chapter 363B of NRS is hereby amended by adding 27 thereto a new section to read as follows: 28 1. Any taxpayer who is required to pay a tax pursuant to NRS 29 363B.110 may receive a credit against the tax otherwise due for 30 any donation of money made by the taxpayer to the Graduate 31 Medical Education Grant Program established by NRS 223.637 in 32 the manner provided by this section. 33 2. To receive the credit authorized by subsection 1, a taxpayer 34 who intends to make a donation of money to the Graduate Medical 35 Education Grant Program shall, before making such a donation, 36 apply to the Office of Science, Innovation and Technology for 37 approval of the credit authorized by subsection 1 for the donation. 38 The Office shall, within 20 days after receiving the application, 39 approve or deny the application and provide to the taxpayer notice 40 of the decision and, if the application is approved, the amount of 41 the credit authorized. Upon receipt of notice that the application 42 has been approved, the taxpayer must, not later than 30 days after 43 receiving the notice, make the donation of money to the Program. 44 Upon receipt of the donation, the Office shall issue a certificate of 45 – 5 – - *SB269* the credit authorized by subsection 1. If the taxpayer does not 1 make the donation of money to the Program within 30 days after 2 receiving the notice, the taxpayer forfeits any claim to the credit 3 authorized by subsection 1. The Office shall notify the Department 4 of Taxation of each application approved pursuant to this 5 subsection, the issuance of each certificate of the credit authorized 6 by subsection 1 and the forfeiture of any claim to a credit 7 authorized by subsection 1. 8 3. The Office of Science, Innovation and Technology shall 9 approve or deny applications for the credit authorized by 10 subsection 1 in the order in which the applications are received. 11 4. The Office of Science, Innovation and Technology may, 12 for each fiscal year, approve applications for the credit authorized 13 by subsection 1 until the total amount of the credits authorized by 14 subsection 1 and approved by the Office pursuant to this 15 subsection and subsection 4 of section 1 of this act is: 16 (a) For Fiscal Year 2025-2026, $4,000,000; 17 (b) For Fiscal Year 2026-2027, $4,120,000; and 18 (c) For each subsequent fiscal year, an amount equal to 103 19 percent of the amount authorized for the immediately preceding 20 fiscal year. 21  The amount of any credit which is forfeited pursuant to 22 subsection 2 must not be considered in calculating the amount of 23 credits authorized for any fiscal year. 24 5. If a taxpayer applies to and is approved by the Office of 25 Science, Innovation and Technology for the credit authorized by 26 subsection 1, the amount of the credit provided by this section is 27 equal to the amount approved by the Office pursuant to subsection 28 2, which must not exceed the amount of the donation made by the 29 taxpayer to the Graduate Medical Education Grant Program. The 30 total amount of the credit applied against the taxes described in 31 subsection 1 and otherwise due from a taxpayer must not exceed 32 the amount of the donation. 33 6. If the amount of the tax described in subsection 1 and 34 otherwise due from a taxpayer is less than the credit to which the 35 taxpayer is entitled pursuant to this section, the taxpayer may, 36 after applying the credit to the extent of the tax otherwise due, 37 carry the balance of the credit forward for not more than 5 years 38 after the end of the calendar year in which the donation is made 39 or until the balance of the credit is applied, whichever is earlier. 40 Sec. 4. NRS 363B.110 is hereby amended to read as follows: 41 363B.110 1. Except as otherwise provided in NRS 360.203, 42 there is hereby imposed an excise tax on each employer at the rate 43 of 1.475 percent of the amount by which the sum of all the wages, 44 as defined in NRS 612.190, paid by the employer during a calendar 45 – 6 – - *SB269* quarter with respect to employment in connection with the business 1 activities of the employer exceeds $50,000. 2 2. The tax imposed by this section: 3 (a) Does not apply to any person or other entity or any wages 4 this State is prohibited from taxing under the Constitution, laws or 5 treaties of the United States or the Nevada Constitution. 6 (b) Must not be deducted, in whole or in part, from any wages of 7 persons in the employment of the employer. 8 3. Each employer shall, on or before the last day of the month 9 immediately following each calendar quarter for which the 10 employer is required to pay a contribution pursuant to 11 NRS 612.535: 12 (a) File with the Department a return on a form prescribed by 13 the Department; and 14 (b) Remit to the Department any tax due pursuant to this chapter 15 for that calendar quarter. 16 4. In det [Text truncated for display. Full text available on LegiScan.]