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Nevada Bill Seeks Internet Sales Tax

  • Apr 24, 2015 | Gail Cole

 Nevada lawmakers consider remote sales tax legislation.

Update 6.11.2015: Nevada Assembly Bill 380, which is substantially similar to SB 382 (see below) has been enacted. Certain sections of the new law take effect July 1, 2015; others take effect October 1, 2015.

The Nevada Senate has unanimously approved a bill that would require certain remote retailers to collect and remit Nevada sales and use tax. The measure references Colorado and New York Internet sales tax laws that the United States Supreme Court tacitly supported by refusing to block. In so doing, it indirectly references a concurring opinion issued by Supreme Court Justice Kennedy in the Colorado case, in which the Justice said the inability of states to collect sales and use tax from certain remote sellers “may well be a serious continuing injustice.”

SB 382 enacts provisions based on a Colorado law creating a sales tax obligation if a retailer is both “part of a controlled group of business entities that has a component member who has a physical presence in this State” and “the component member with such physical presence engages in certain activities in this State that relate to the ability of the retailer to make retail sales to residents of this State.” Retailers may rebut the presumption.

It also enacts “a provision based on a New York law” which creates a sales and use tax obligation if the following are both true:

  • “The retailer enters into an agreement with a resident of this State under which the resident receives certain consideration for referring potential customers to the retailer through a link on the resident’s Internet website or otherwise; and
  • The cumulative gross receipts from sales by the retailer to customers in this State through all such referrals exceeds a certain amount [$10,000] during the preceding four quarterly periods.”

Supporters of the bill “argue that Nevada small businesses are penalized when consumers window shop in their stores, and then buy identical items online from out-of-state companies to avoid paying sales tax.” It should be noted that such window shoppers are not buying from Amazon; the giant e-tailer began collecting Nevada sales tax in January 2014. Still, the enactment of SB 382 or similar legislation would, in theory anyway, make it even more difficult for Nevadans to avoid sales tax by shopping online (Las Vegas Review Journal).

As more and more states seek ways to tax currently untaxed remote sales, retailers doing business in multiple states should seek ways to simplify management of sales tax. Learn how an automated solution works.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.