Nevada Creates Tax Amnesty Program Providing Relief From Penalties and Interest

Fennemore Craig Client Alert

Nevada Creates Tax Amnesty Program Providing Relief From Penalties and Interest

The Nevada Legislature wrapped up a 12-day special session on July 19, 2020. The purposes of this special session was to address an expected budget shortfall of $1.2 billion, nearly a quarter of the state’s previously-approved fiscal year budget. Among the measures enacted by the Legislature during this special session is an amnesty program allowing certain taxpayers to pay delinquent state taxes without any penalties or interest.

Section 10 of Senate Bill 3 requires the Nevada Department of Taxation (the “Department”) to establish this amnesty program, which will apply to all categories of taxes paid to the Department, including sales and use taxes, excise taxes, the Commerce Tax, and the Modified Business Tax. The legislation includes a few key limitations:

  • The amnesty program will only apply to taxes, fees and assessments that were due and payable prior to July 20, 2020.
  • Taxpayers must comply with the application method that the Department establishes.
  • The amnesty program is not open to taxpayers who have already entered into a compromise or settlement agreement with the Department or the Nevada Tax Commission to address the delinquent taxes.
  • Payment must be submitted in full for each tax period for which the taxpayer requests relief.

Penalties and interest on delinquent taxes often snowball quickly and can significantly increase a taxpayer’s ultimate tax bill. Delinquent taxes can lead to crippling consequences like liens on real and personal property. Failing to resolve delinquent taxes may also interfere with a business owner’s plans to sell their business. For taxpayers that qualify to participate, this amnesty program could substantially lighten their delinquent tax burden. Importantly, once established, this amnesty program will run for only 90 days. For that reason, it is critical that taxpayers who might benefit from the program act quickly to take advantage of this rare opportunity to obtain relief from penalties and interest.

If you have questions about your Nevada tax obligations, or if you would like to speak with an attorney about this new amnesty program, please contact Dan Reaser or Katie Hoffman.

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