Nevada Tax Form Notes (Page 2 of 4) in pdf

The trade-in or trade-down for vessels was not affected

“ASK THE ADVISORS” BASIC TRAINING—NORTH

by the vote; therefore, the trade-in allowance tax credit

will remain at the local county rate, for example, 5.75%

The Department will be presenting basic tax training as

for Clark County. Vessel dealers will still be required to

well as industry-specific training throughout the year.

submit

the

Supplemental

Trade-In/Trade-Down

The three-hour free workshops include training on

worksheet with their Sales/Use Tax Return.

Business License requirements, Sales and Use Tax,

Modified

Business

Tax,

Live

Entertainment

Tax,

collection of taxes, resale certificates, exemptions, how

NEW EXEMPTION FOR

to prepare amended tax returns, how to prepare for an

FARM MACHINERY AND

audit and your petition rights. The workshops are held in

EQUIPMENT

the Reno Office listed on this page and begin at

9:00 a.m. and conclude at 12 noon. The next class is

In the general election on November 7, 2006, the

scheduled for Wednesday January 17, 2007. Subjects

electorate approved Ballot Question 8. The passage of

presented at the January 17 workshop will include basic

this question exempts the sales of Farm Machinery and

taxation, restaurant and comp issues. The workshop

Equipment from both the state and local portions of

scheduled for Wednesday, March 14, 2007, will address

Sales and Use Tax. As a result, Sales and Use tax will

basic taxation, automotive and boating sales and leasing

be eliminated on the sale of Farm Machinery and

issues.

Equipment beginning January 1, 2007.

TRADE-IN ALLOWANCE TAX CREDIT CHANGE

(a) “Farm machinery and equipment” means a farm

FOR VEHICLES

tractor, implement of husbandry, piece of equipment

used for irrigation, or a part used in the repair or

In the general election on November 7, 2006, the

maintenance of farm machinery and equipment. The

electorate approved Ballot Question 8. The passage of

term does not include:

this question will affect the amount of the tax credit a

(1) A vehicle required to be registered pursuant to

purchaser will receive for the trade-in of a vehicle toward

the provisions of chapter 482 or 706 of NRS; or

the purchase of another vehicle.

(2) Machinery

equipment

only

incidentally

employed for agricultural purposes.

Effective January 1, 2007, the trade-in allowance for

vehicles will be treated as a deduction from gross

receipts rather than a credit toward the local portion of

(b) “Farm tractor” means a motor vehicle designed and

the tax. For example, if a dealer sells a vehicle for

used primarily for drawing an implement of husbandry.

$25,000 but gives the purchaser $15,000 in credit on the

trade-in of another vehicle, the tax will be calculated on

the net sales price of $10,000. The tax will be calculated

designed, adapted or used for agricultural purposes,

at the full rate of the county in which the sale occurs (for

including, without limitation, a plow, machine for mowing,

example, 7.75% for Clark County). With respect to trade-

hay baler, combine, piece of equipment used to stack

downs (a transaction where the allowance for the trade-

hay, till, harvest, handle agricultural commodities or

in exceeds the sales price), the amount deducted may

apply fertilizers, or other heavy, movable equipment

not exceed the total sales price. The deduction for a

designed, adapted or used for agricultural purposes.

trade-in or trade-down, as applicable, must be reported

in the exemption column of the Sales/Use Tax Return as

Beginning with the filing of the January 2007 Sales/Use

described below.

Tax return due on February 28, 2007, transactions

involving farm machinery or equipment will be reported

Beginning with the filing of the January 2007 Sales/Use

in Column A (Total Sales) and then exempted in Column

Tax Return due on February 28, 2007, retailers of

B (Exempt Sales). For example: A vendor sells a farm

vehicles will no longer be required to submit the

tractor for $20,000. It will be reported in Column A and

Supplemental Trade-In/Trade-Down worksheet with the

Column B, thus resulting in no tax.

Sales/Use Tax return. Instead, these transactions will be

included on the regular Sales/Use Tax Return as

PENALTY AND INTEREST

follows: (1) Trade-In—the total value given for a trade-in

is to be reported in the exemption column; i.e., a

Pursuant to NRS 360.417, the Department will impose a

customer purchases a vehicle for $25,000 and is given

10% penalty when a person fails to pay any tax to the

$15,000 for a trade-in, the $25,000 is entered in

State within the time required. In addition, interest must

Column A (Total Sales) and the $15,000 is entered in

be computed on the late payment at the rate of 1% per

Column B (Exempt Sales); and (2) Trade-Down—only

month. Periodically, taxpayers will call or write to the

the total value of the vehicle purchased is reported in the

Department requesting a waiver or reduction of a

exemption; i.e., a customer purchases a vehicle for

penalty or interest. NRS 360.419 allows for waiver or

$25,000 and is given $30,000 for a trade-in, the $25,000

reduction by the Executive Director or a hearing officer

is reported in Column A (Total Sales) and the $25,000 is

but only if the late payment of tax is a result of

also reported in Column B (Exempt Sales).

circumstances beyond the taxpayer’s control and

Nevada Tax Form Notes Page 2

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