EFFECTIVE OCT. 1, 2018 - NEVADA REQUIRES REMOTE SELLERS TO COLLECT SALES TAX
What is the effect of the Wayfair decision?
The United States Supreme Court ruled in
South Dakota v. Wayfair on June 21,
2018, that states can require remote sellers to collect and remit the
applicable sales or use tax on sales delivered to locations within their state
– regardless of whether the seller has a physical presence in the state. Consistent with the Wayfair decision, Nevada has adopted regulations that establish requirements for remote sellers that make retail sales into Nevada.
Who is a remote seller?
A “remote seller” is a seller that does not
have a physical presence or that had no other legal requirement to register and
collect the applicable sales or use taxes in the state.
Are all remote sellers required to register in Nevada, or are there exceptions for small sellers?
Remote sellers are only required to register and collect
Nevada sales or use tax if, in the previous or current calendar year, they have:
- More than $100,000 of retail sales into
- 200 or more separate retail transactions for
delivery into the state
However, these small sellers may still volunteer to register and collect tax in this state as
a benefit to their Nevada customers.
When must a remote seller be registered in Nevada?
Nevada’s new rules went into effect
October 1, 2018. Once a remote seller hits the threshold described above
(>$100,000 in retail sales or 200 or more retail transactions for delivery into Nevada in
the previous or current calendar year), they must register by the first day of
the calendar month that begins at least 30 calendar days after they hit the
threshold. Sales tax must be collected beginning with retail sales on that date, but
does not need to be collected on sales made prior to that date. For example, if
a remote seller has already met the threshold on October 1, 2018, they must
register and begin collecting sales tax on retail sales by November 1, 2018.
Some remote sellers may wish to
register and begin collecting and remitting sales tax before they meet the
threshold. They may do that at any time.
How do remote sellers register to collect and remit sales and use tax for Nevada?
The best way for remote sellers to register to begin
collecting and remitting Nevada’s sales and use taxes is through the Streamlined Sales and Use Tax Registration System. This allows sellers to register for all “Streamlined states” in one
place. Many of those states will also require remote sellers to collect and
remit sales and use taxes (there are currently 23 full member states).
Alternately, a remote seller can register
directly with Nevada. The simplest way to do this is using Nevada Tax Center, the same online system that
can be used to file and pay sales and use tax.
Are remote sellers that are already registered in Nevada affected by the Wayfair decision?
Remote sellers that were registered prior to the Wayfair decision are not impacted by
this decision and should continue to collect and remit the applicable sales or
use tax as they have in the past. (Note: If the remote seller does not collect and remit the
applicable sales or use tax, the purchaser is still responsible for reporting
and paying the tax directly to Nevada.)
Are remote sellers required to collect and remit tax on all retail sales made into Nevada, including those made over the Internet?
Yes. Remote sellers that do not meet the small sellers exception are
required to collect and remit the tax on all taxable retail sales made for delivery
into Nevada, including those retail sales made
over the internet that are sent to Nevada.
The Internet Tax Freedom Act, originally enacted in October 1998 and made
permanent on February 24, 2016, does not prohibit Nevada from taxing sales made
over the Internet.)
Are remote sellers liable for tax on retail sales into Nevada that were made prior to Nevada's new requirements?
If the remote seller is required to register, collect, and remit the tax solely because of the Wayfair
decision, the remote seller is not liable for the sales tax on sales into Nevada
that occurred prior to
the effective date of Nevada’s new requirements.
How often does Nevada require remote sellers to file sales and use tax returns?
If a remote seller is registered through the Streamlined Sales and Use Tax Registration System and uses a Certified Service Provider (CSP) to perform its sales and
use tax functions (i.e., CSP Services), the CSP will file monthly sales and use
tax returns on behalf of the remote seller.
For a remote seller that will
file their own sales and use tax returns, and whose taxable sales do not exceed $10,000 per month, the
filing frequency is quarterly.
How do remote sellers file sales and use tax returns in Nevada?
If a remote seller is registered through the Streamlined Sales and Use Tax Registration System and using a Certified Service Provider (CSP) to
perform its sales and use tax functions (i.e., CSP Services), the CSP will file
monthly sales and use tax returns on behalf of the remote seller.
If a remote seller is registered directly with
Nevada and is submitting their own sales and use tax returns, they can download and file paper returns or use Nevada Tax Center, the Department’s online filing system.
What is a Certified Service Provider?
A Certified Service Provider (CSP) is an agent certified under the national Streamlined Sales and
Use Tax Agreement to perform all the seller’s sales and use tax functions,
other than the seller's obligation to remit tax on its own purchases. A CSP is
designed to allow a business to outsource most of its sales tax administration
Does the Wayfair decision create a new tax in Nevada?
No. Nevada’s new rules following Wayfair extend the requirement to collect and remit sales tax to
remote sellers. Prior to Nevada’s implementation of Wayfair rules, retailers were not required to collect sales tax
unless they had a physical presence in the state. However, sales into Nevada
were still taxable: purchases made in Nevada from out-of-state retailers were
subject to Nevada’s use tax, which the purchaser was liable for
remitting to the Department when no sales tax was collected by the retailer.
Again, following Wayfair, the seller
must now collect and remit sales tax on those sales into Nevada.
Are remote sellers required to collect both the state and local sales and use taxes?
Yes. Remote sellers registered in Nevada to collect and remit
sales and use taxes are required to collect both the state and local sales or
use taxes that apply to the transaction.
In Nevada, the local taxes are collected and reported at the same time
as the state sales tax and all are remitted to the state.
Will remote sellers be subject to audits by the Department?
Remote sellers are subject to audit, just like any other seller.
Does the Wayfair decision affect purchasers in Nevada?
Purchasers in Nevada may see an increased number
of remote sellers that begin charging the applicable state and local sales or
use tax. This will help reduce the
number of purchases each individual purchaser is required to track and remit
the use tax on directly to the Department.
However, if a remote seller does not charge the appropriate state and
local tax on a taxable item in Nevada, the purchaser is still responsible for reporting
and paying the applicable use tax on the purchase price directly to the Department.