Nevada State Tax Protest — Modified Business Tax and Commerce Tax

PETITION FOR REDETERMINATION / APPEAL TO THE NEVADA TAX COMMISSION — MODIFIED BUSINESS TAX AND/OR COMMERCE TAX

TABLE OF CONTENTS

1. Caption
2. Parties and Procedural Posture
3. Tax at Issue
4. Statement of Facts
5. Statement of Contested Issues
6. Legal Argument
7. Computation of Correct Liability
8. Request for Relief
9. Reservation of Rights and Hearing Request
10. Verification
11. Certificate of Service
12. Nevada Practice Notes
13. Sources and References

1. CAPTION

STATE OF NEVADA

DEPARTMENT OF TAXATION — and on appeal —

BEFORE THE NEVADA TAX COMMISSION

MATTER NO. [________________________________]

PETITION FOR REDETERMINATION AND, IF NECESSARY, NOTICE OF APPEAL TO THE NEVADA TAX COMMISSION

2. PARTIES AND PROCEDURAL POSTURE

2.1. Petitioner [TAXPAYER LEGAL NAME] ("Taxpayer") is a [entity type] organized under the laws of [state of formation], with its principal place of business at [ADDRESS], holding Nevada Taxpayer ID No. [TID] and Nevada Business ID No. [NVBID].

2.2. Respondent is the Nevada Department of Taxation ("Department"), the agency charged with administration of state tax laws under Title 32 of the Nevada Revised Statutes.

2.3. On [DATE], the Department issued to Taxpayer a Notice of Deficiency Determination No. [#####] assessing additional tax in the amount of $[AMOUNT], plus penalty of $[AMOUNT] and interest of $[AMOUNT], for the reporting periods [PERIODS] (the "Determination").

2.4. This Petition is filed within forty-five (45) days of service of the Determination as required by NRS § 360.360. To the extent the Department issues a decision on this Petition adverse to Taxpayer, Taxpayer hereby preserves and asserts its right to appeal to the Nevada Tax Commission within thirty (30) days of service of that decision pursuant to NRS § 360.245(1).

3. TAX AT ISSUE

3.A Modified Business Tax (NRS Chapters 363A and 363B)

3.A.1. Tax base. Modified Business Tax ("MBT") is imposed quarterly on the wages paid by an employer in connection with a business activity in Nevada, less allowable deductions for amounts paid by the employer for qualified health-care benefits.

3.A.2. Applicable rate. Taxpayer is subject to [General Business under NRS § 363B.110 — 1.378% / 1.17% (verify current rate)] or [Financial Institution / Mining under NRS § 363A.130 — 1.554%] of taxable wages exceeding the quarterly threshold.

3.A.3. Wage threshold. Under NRS § 363B.110, the first $50,000 of taxable wages per calendar quarter for a general-business employer is excluded.

3.A.4. Commerce Tax credit. Pursuant to NRS § 363B.117 (and § 363A.130 mirror provision), Taxpayer is entitled to a credit equal to fifty percent (50%) of the Commerce Tax paid for the preceding fiscal year, applied against MBT due for any of the four calendar quarters immediately following payment of the Commerce Tax.

3.B Commerce Tax (NRS Chapter 363C)

3.B.1. Tax base. Commerce Tax is imposed annually on each "business entity" engaged in business in Nevada whose Nevada gross revenue for the taxable year exceeds $4,000,000, per NRS § 363C.200.

3.B.2. Industry rate. Taxpayer is classified within NAICS-based business category [CATEGORY], subject to a tax rate of [RATE]% under NRS § 363C.310 et seq.

3.B.3. Filing deadline. Returns are due on or before the forty-fifth (45th) day following the end of the taxable year (a fiscal year ending June 30) per NRS § 363C.200(2).

3.B.4. Permitted deductions/exclusions. NRS § 363C.220 excludes specified categories of receipts (e.g., interest, dividends, certain pass-through receipts, sales for resale, returns and allowances) from "gross revenue."

4. STATEMENT OF FACTS

4.1. Taxpayer's business activities during the audit period are described as follows: [NARRATIVE OF OPERATIONS, NEVADA NEXUS, AND REPORTING POSTURE].

4.2. Taxpayer timely filed returns and remitted tax for each reporting period at issue: [LIST OF RETURNS AND DATES FILED].

4.3. The Department conducted an audit commencing on [DATE] and concluding with the issuance of the Determination on [DATE].

4.4. The auditor proposed adjustments based on [SUMMARY — e.g., reclassification of wages, disallowance of health-benefit deduction, recharacterization of receipts as Nevada gross revenue, denial of the Commerce Tax credit, denial of NAICS category election, etc.].

4.5. Taxpayer maintains contemporaneous books and records sufficient to substantiate the positions taken on the returns, including: [LIST DOCUMENTS — payroll registers, Forms W-2/W-3, healthcare-benefit invoices, general-ledger detail, sales journals, NAICS classification documentation, transaction-level support].

5. STATEMENT OF CONTESTED ISSUES

Taxpayer contests the Determination on the grounds set forth below. Each contested adjustment, the dollar amount in dispute, and the controlling authority are summarized:

6. LEGAL ARGUMENT

6.1 Burden of Proof

Taxpayer acknowledges that, as petitioner, it bears the burden of proving the Determination incorrect by a preponderance of the evidence. Taxpayer submits the contemporaneous records identified above and the analysis below to satisfy that burden.

6.2 Nevada Has No Personal Income Tax — Construction of Business-Tax Statutes

Nevada imposes no tax on individual income. The taxes at issue here are excise/business taxes administered under Title 32. Nevada courts construe revenue statutes strictly against the State and any ambiguity in the imposition is resolved in favor of the taxpayer. See Sierra Pac. Power Co. v. Dep't of Taxation, 130 Nev. 940 (2014).

6.3 Issue-Specific Argument

Issue 1 — [Concise issue description]. The Determination disallows [ITEM] in the amount of $[AMOUNT]. NRS § [CITATION] provides that [STATUTORY TEXT/RULE]. The audit workpapers demonstrate that [FACTS], satisfying the statutory requirements. Accordingly, the adjustment is incorrect and should be reversed.

Issue 2 — [Concise issue description]. [ARGUMENT].

Issue 3 — [Concise issue description]. [ARGUMENT].

6.4 Penalties

Penalties imposed under NRS § 360.300 should be abated for reasonable cause where the Taxpayer relied in good faith on [BASIS — written Department guidance, professional advice, prior audit treatment, etc.]. See NAC § 360.395 (waiver of penalty for reasonable cause).

6.5 Interest

Taxpayer disputes interest only to the extent the underlying tax is reduced. Taxpayer reserves the right to seek interest abatement under NRS § 360.419 to the extent any portion of the delay is attributable to the Department.

7. COMPUTATION OF CORRECT LIABILITY

Taxpayer's calculation of correct liability for each period at issue is set forth in Exhibit A (Schedule of Recomputed Liability). Summary:

8. REQUEST FOR RELIEF

WHEREFORE, Taxpayer respectfully requests that the Department, and on appeal the Nevada Tax Commission:

• A. Vacate the Determination in whole or in part as set forth above;
• B. Abate all penalties for reasonable cause;
• C. Adjust interest to conform to the corrected tax;
• D. Issue a corrected Notice or Notice of Credit consistent with this Petition;
• E. Stay collection activity pending final resolution as permitted by NRS § 360.350; and
• F. Grant such other and further relief as the Department or Tax Commission deems just and proper.

9. RESERVATION OF RIGHTS AND HEARING REQUEST

9.1. Oral hearing. Taxpayer requests an oral hearing pursuant to NAC § 360.155 et seq. Taxpayer estimates [HOURS] hours for direct presentation, with right of rebuttal.

9.2. Production of audit file. Taxpayer requests production of the complete administrative record, including all auditor workpapers, supervisor reviews, and internal correspondence relating to the Determination.

9.3. Reservation of appellate rights. Taxpayer expressly preserves: (i) the right to appeal an adverse decision to the Nevada Tax Commission within 30 days under NRS § 360.245; (ii) the right to seek judicial review under NRS § 233B.130 within 30 days of the Tax Commission's final decision; and (iii) the right to amend or supplement this Petition.

9.4. Payment-under-protest reservation. To the extent Taxpayer makes any payment toward the Determination prior to final resolution, such payment is made under protest and without waiver of any defense, claim for refund, or right of judicial review. See NRS § 360.395.

10. VERIFICATION

STATE OF NEVADA

COUNTY OF [COUNTY]

I, [OFFICER NAME], being first duly sworn, depose and say that I am the [TITLE] of Taxpayer; that I am authorized to execute this Petition on its behalf; that I have read the foregoing Petition and know its contents; and that the same is true to my own knowledge except as to those matters stated upon information and belief, and as to those I believe them to be true.

[________________________________]

[OFFICER NAME], [TITLE]

Sworn to and subscribed before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public — State of Nevada

(My Commission Expires: [_______________])

11. CERTIFICATE OF SERVICE

I hereby certify that on this the [____] day of [_______________], 20[____], a true and correct copy of the foregoing PETITION FOR REDETERMINATION was served upon the Nevada Department of Taxation by [U.S. CERTIFIED MAIL, RETURN RECEIPT REQUESTED / HAND DELIVERY / E-SERVICE] at:

Nevada Department of Taxation
Attn: [Hearing Officer / Compliance Division]
3850 Arrowhead Drive, 2nd Floor
Carson City, Nevada 89706

[________________________________]

[ATTORNEY OR AUTHORIZED REPRESENTATIVE]

12. NEVADA PRACTICE NOTES

• No state personal income tax. The Nevada Constitution, Art. 10, § 1, and Nevada's longstanding statutory regime do not impose a tax on individual income. References to a "state income tax protest" in Nevada must be reframed against the Modified Business Tax (MBT, NRS Ch. 363A and 363B) and/or the Commerce Tax (NRS Ch. 363C). Property tax (NRS Ch. 361) and live-entertainment tax (NRS Ch. 368A) are administered separately.
• Modified Business Tax basics. MBT is a quarterly payroll tax measured by gross wages reported to the Nevada Department of Employment, Training and Rehabilitation (DETR), less qualifying health-care expenditures. The general-business rate (NRS § 363B.110) and the financial-institution / mining rate (NRS § 363A.130) differ. Verify the current rate before computing liability — the general-business rate has been adjusted by legislative action in recent biennia.
• Commerce Tax threshold. Commerce Tax applies only when Nevada gross revenue exceeds $4,000,000 in the taxable year (fiscal year ending June 30) per NRS § 363C.200. Returns are due 45 days after fiscal-year close. Even taxpayers below the threshold may have historical filing obligations or notification requirements; confirm period-by-period.
• Two-step appeal. Step 1: Petition for Redetermination filed with the Department within 45 days of the Notice of Deficiency Determination (NRS § 360.360). The matter is heard by an Administrative Law Judge or hearing officer. Step 2: appeal to the Nevada Tax Commission within 30 days of service of the ALJ/Department decision (NRS § 360.245(1)).
• Judicial review. Within 30 days of service of the Tax Commission's final decision, file a petition for judicial review in district court under NRS § 233B.130. Critically, NRS § 360.395 requires that, before judicial review, the taxpayer either pay the determination or enter a written payment agreement with the Department. Failure to do so deprives the district court of subject-matter jurisdiction.
• Burden of proof. The taxpayer bears the burden of proving error. The Department's determination is presumed correct; clear, contemporaneous records are essential.
• Statute of limitations on assessment. Generally three (3) years from the date the return was filed (NRS § 360.355), extended to eight (8) years if no return was filed and indefinite for fraud.
• Penalty abatement. Penalties under NRS § 360.300 may be abated for reasonable cause (NAC § 360.395) — establish good-faith reliance on professional advice, prior audit acquiescence, or written Department guidance.
• Recordkeeping. Records must be retained for at least four (4) years (eight (8) years for unregistered businesses) under NRS § 372.735 — this period also frames audit-readiness for MBT and Commerce Tax matters.

13. SOURCES AND REFERENCES

• NRS Chapter 360 — General Provisions: https://www.leg.state.nv.us/NRS/NRS-360.html
• NRS § 360.245 (Decision final unless appealed; 30-day appeal): https://www.leg.state.nv.us/NRS/NRS-360.html#NRS360Sec245
• NRS § 360.291 (Taxpayers' Bill of Rights): https://www.leg.state.nv.us/NRS/NRS-360.html#NRS360Sec291
• NRS § 360.395 (Prerequisites for judicial review): https://www.leg.state.nv.us/NRS/NRS-360.html#NRS360Sec395
• NRS Chapter 363A — Modified Business Tax (Financial Institutions & Mining): https://www.leg.state.nv.us/nrs/NRS-363A.html
• NRS Chapter 363B — Modified Business Tax (General Business): https://www.leg.state.nv.us/NRS/NRS-363B.html
• NRS Chapter 363C — Commerce Tax: https://www.leg.state.nv.us/nrs/NRS-363C.html
• NRS § 363C.200 (Commerce Tax imposition; $4M threshold): https://nevada.public.law/statutes/nrs_363c.200
• NRS Chapter 233B — Nevada Administrative Procedure Act: https://www.leg.state.nv.us/nrs/nrs-233b.html
• Nevada Department of Taxation — Appeals FAQ: https://tax.nv.gov/faqs/appeals-faqs/
• Nevada Department of Taxation — Appeals to the NTC: https://tax.nv.gov/FAQs/Appeals_to_the_NTC/
• Nevada Department of Taxation — Modified Business Tax Guide: https://tax.nv.gov/wp-content/uploads/2024/03/Modified-Business-Tax.pdf
• Nevada Department of Taxation — Commerce Tax Return Instructions: https://tax.nv.gov/wp-content/uploads/2024/05/Commerce-Tax-Return-Instructions-6-2023.pdf
• Sierra Pac. Power Co. v. Dep't of Taxation, 130 Nev. 940 (2014)

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Nevada must review and customize this document before filing. Nevada has no state personal income tax; this instrument addresses Modified Business Tax and Commerce Tax controversies. Statutes, regulations, and rates change; verify all authorities before use.