Filing Requirement FAQ


What is Commerce Tax?

Commerce Tax is a tax on a privilege of engaging in business in Nevada.

    What entities are subject to Commerce Tax?

    Each business entity whose Nevada gross revenue in a taxable year exceeds $4,000,000 is required to file the Commerce Tax return.

      What is a business entity?

      A business entity means:

      • bank
      • business association 
      • business trust
      • C- or S-corporation 
      • holding company
      • joint stock company
      • joint venture *
      • limited-liability company
      • limited-liability partnership
      • partnership 
      • professional association
      • savings and loan association
      • sole proprietorship
      • any other person engaging in a business in Nevada, including a natural person filing schedule E, part I, with their Federal tax return 

      *Note: joint venture, except for a joint operating or co-ownership arrangement which meets the requirements of 26 C.F.R. §1.761-2(a)(3), Treasury Regulations §1.761-2(a)(3) that elect out of federal partnership treatment as provided by 26 U.S.C. §761(a).

        What is “engaging in business”?

        “Engaging in business” means commencing, conducting or continuing a business, the exercise of corporate or franchise powers regarding a business, and the liquidation of a business which is or was engaging in a business when the liquidator holds itself out to the public as conducting that business.

          What entities have to file the Commerce Tax return?

          Each business entity whose Nevada gross revenue in a taxable year exceeds $4,000,000 is required to file the Commerce Tax return.

            What entities are exempt from Commerce Tax?

            The list of entities exempt from the Commerce Tax is limited to:

            •  Natural person, unless such person is engaged in a business and files Schedule C, E (Part 1) or F with the   federal tax return; 
            •  Governmental entity
            •  Non-profit organization pursuant to section 501(c) of the Internal Revenue Code; 
            •  Business entity organized pursuant to NRS 82 or NRS 84; 
            •  Credit union
            •  Grantor trust, excluding a trust taxable as a business entity for federal tax purposes;
            •  Estate of a natural person, excluding an estate taxable as a business entity for federal tax purposes; 
            •  Certain REITs – Real Estate Investment Trusts
            •  REMIC – Real Estate Mortgage Investment Conduit  
            •  Trust qualified under section 401(a) of the Internal Revenue Code
            •  Passive Entity
            •  Entity, which only owns and manages intangible investments, such as stocks, bonds, patents, trademarks
            •  Participant in an exhibition NOT required to obtain state business license (NRS 360.780)
            •  Any person or entity which is prohibited from taxing pursuant to Constitution or law

              What is the $4,000,000 threshold?

              $4,000,000 is the standard amount a business entity is allowed to deduct from its Nevada gross revenue before the Commerce Tax is imposed.

                I am a sole proprietor and I am exempt from the Nevada Business License. Am I exempt from the Commerce Tax?

                No. However, if your Nevada gross revenue during a taxable years is $4,000,000 or less, you are no longer required to file a Commerce Tax return for 2018-2019 tax year and after. If you Nevada gross revenue during a taxable year is over $4,000,000 you are required to file a Commerce Tax return.

                  I am a small business owner and my revenue is less than $4,000,000. Do I have to file the Commerce Tax return?

                  No. Starting 2018-2019 tax year there is no Commerce Tax filing requirement for the businesses with the Nevada gross revenue of $4,000,000 or less during the taxable year.

                    I received a Form 1099-MISC from the company I work for here in Nevada. Am I a business entity?

                    Yes. Your company treats you as an independent contractor. Independent contractors are subject to Commerce Tax. If you file Schedule C with your Federal income tax return and your Nevada gross revenue is over $4,000,000, you must file a Commerce Tax return.

                      I have a rental property in Nevada. Am I a subject to the Commerce Tax?

                      Yes. According to Commerce Tax law, rent is NOT passive income.

                        I am registered with the Nevada Secretary of State but my corporation makes $0. Do I have to file the Commerce Tax return?

                        No. Starting 2018-2019 tax year a Commerce Tax filing requirement for those with Nevada gross revenue of $4,000,000 or less has been eliminated. However, if the gross revenue of your corporation exceeds $4,000,000 during the taxable year in the future, you will be required to file a Commerce tax return for your business for that taxable year.

                          My Nevada business closed during the year. Do I have to file the Commerce Tax return?

                          Yes. To close the Commerce Tax account with the Department of Taxation you have to file a final Commerce Tax return for your business.

                            My business is incorporated outside of Nevada. Does it have a Commerce Tax filing requirement?

                            For businesses located outside of Nevada, a minimum connection with Nevada and $4,000,000 Nevada gross revenue tests, both should be met in order for them to be subject to Commerce Tax.  Please review section 16 of the Commerce Tax Regulations. The Department also developed a Nexus Questionnaire to help out-of-state businesses to determine their filing requirement.

                              Our Nevada company has subsidiaries in Nevada and in other states. It files a consolidated Federal tax return. Can it file a consolidated tax return for the Commerce Tax?

                              No. Each entity has to determine its own filing requirement and file its own return, if a filing requirement exists.