Nevada Assembly Revenue Committee advances multiple tax bills, adopts amendments

The Assembly Committee on Revenue on an April work session advanced a slate of revenue bills affecting the commerce tax, sales-and-use tax exemptions and the taxation of digital products and cannabis, and voted to move a school career-coaching measure forward.

The committee approved amendments and motions to advance Assembly Bill 276, AB 453, AB 457, AB 535 and AB 539 and moved AB 307 without recommendation. Committee members assigned floor statements as each measure advanced. Several votes included recorded opposition from individual Assembly members; the bills proceed next to the floor as amended or as noted.

Why it matters: The bills under consideration would change how Nevada applies its commerce tax threshold and how certain sales are taxed, affect tax treatment for groups of real-estate–related business entities, clarify the state’s process for determining sales-and-use tax exemptions for organizations claiming 501(c)(3) status, and alter taxation of cannabis and specified digital products. Those changes have potential implications for business compliance, local government reimbursements and state revenue projections.

AB 276 — CPI adjustment to commerce tax exemption

Assembly Bill 276 would replace the fixed $4,000,000 exemption threshold for the commerce tax with an annually adjusted amount based on the average 12-month percentage increase in the Consumer Price Index over the prior three calendar years. A conceptual amendment from Assemblymember Michael O'Neil (sponsor) would require the Department of Taxation to round the annual calculation to the nearest $100,000 and to publish the initial FY 2026 calculation within 30 days of the bill’s effective date; subsequent calculations for FY 2027 and future years would be published no later than March 1. The bill also would amend NRS 363C.620 to specify that the Department of Taxation may disallow interest on overpayments where a taxpayer used an incorrect exemption threshold on a return.

Susanna Powers, deputy fiscal analyst with the Fiscal Analysis Division, summarized the bill and the proposed amendment for the committee. Vice Chair Considine explained his opposition on revenue grounds during discussion, saying, “I will be voting no on bills abating or negating revenue which includes this bill.” The committee voted to amend and do pass the bill; four members recorded no votes and the motion carried. A floor statement was assigned to Assemblymember O'Neil.

AB 453 — Tax on specified digital products; changes to commerce tax provisions (amended)

AB 453 would impose a tax on retail sales or use of specified digital products — including digital audio works, digital audiovisual works, digital books and digital code — at a rate equal to the county sales-and-use tax rate where the product is purchased or used. Proceeds would be distributed in the same manner as the sales-and-use tax. The bill originally would have lowered the commerce tax threshold from $4,000,000 to $3,500,000 and removed an exemption for live entertainment by Nevada-based professional sports teams; a conceptual amendment submitted by Assemblymember Anderson added other sponsors, removed the proposed change to the commerce tax exemption threshold, and restored the professional-sports-team exemption. The amendment also would require legislative review of transferable tax credits if the Economic Forum projects a projected decrease greater than 7% and would restrict issuance or use of certain transferable tax credits if rainy-day funds are used during the biennium.

Powers reviewed the bill language for the committee. The committee voted to amend and do pass AB 453 as described in the work-session documents; four members recorded no votes. A floor statement was assigned to Assemblymember Anderson.

AB 457 — Combined taxpayer groups for commerce tax

AB 457 would require certain business entities primarily engaged in rental real property and under common ownership to be treated as a single combined taxpayer group for commerce tax purposes, with applicability and amounts determined by combined Nevada gross revenue. A conceptual amendment from sponsor Assemblymember Considine asked the Revenue Joint Interim Committee to hold meetings to study combined taxpayer groups and revenue impacts before further action.

During the work session, several members expressed reservations about specifics of the amendment and asked for additional review. The motion to amend and do pass carried, with three members recording no votes. A floor statement was assigned to Vice Chair Considine.

AB 535 — Sales-and-use tax exemption clarification for nonprofit and educational organizations

AB 535 would amend provisions governing sales-and-use tax exemptions for religious, charitable and educational organizations to allow organizations to satisfy the exemption requirement by showing they operate exclusively for purposes exempt under Internal Revenue Code section 501(c)(3) and are recognized as exempt by the Internal Revenue Service. An amendment from Assemblymember Backus would add standards for how the Department of Taxation determines whether an organization meets the charitable-purpose requirements, require actions the department must take if an organization does not qualify, and require certain reporting by the department to the Joint Interim Standing Committee on Revenue. Michael Nakamoto of the Fiscal Analysis Division advised the committee that the amendment should technically reference both NRS chapter 372 and chapter 374 (which governs the local school support tax); he recommended the motion include that technical clarification.

The committee voted unanimously to amend and do pass AB 535 with the sponsor’s amendment and the technical clarification; Assemblymember Backus took the floor statement.

AB 539 — Career coaching program in middle and junior high schools

AB 539, sponsored by the Assembly Committee on Revenue on behalf of the Joint Interim Standing Committee on Revenue, would require the Governor’s Office of Workforce Innovation to establish a career-coaching program in middle and junior high schools, subject to available funding. The program would guide students in exploring careers and building readiness skills; the amendment adopted in committee adds financial literacy and explicitly permits nonprofit partners to collaborate on the program.

The committee voted unanimously to amend and do pass AB 539. Assemblymember Flanagan will deliver the floor statement.

AB 307 — Cannabis taxation changes moved without recommendation

AB 307 would make several changes relating to cannabis taxation, including eliminating the 15% wholesale tax, increasing the excise tax on retail sales from 10% to 14.25% and (in earlier drafts) removing a $5,000,000 annual reimbursement to local governments for certain costs; a proposed amendment from Assemblymember Gallant restored the $5,000,000 reimbursement. After a brief recess for questions, the committee voted to move AB 307 without recommendation; one member recorded a no vote on that motion. The matter will proceed to the floor per the committee’s action.

Procedure and next steps

Committee members assigned floor statements for the bills advanced. The work session concluded with an open call for public comment; staff confirmed there were no public callers on the phone lines and the chair adjourned the hearing.

Votes at a glance

- AB 276 (commerce tax CPI adjustment): Motion to amend and do pass carried; recorded no votes: Assemblymembers Golding, Roth, Flanagan and Vice Chair Considine. (Floor statement: Assemblymember O'Neil.) - AB 453 (specified digital products tax; other provisions, amended): Motion to amend and do pass carried; recorded no votes: Assemblymembers O'Neil, Gallant, (record shows "Grama"), and Haven/Hafen. (Floor statement: Assemblymember Anderson.) - AB 457 (combined taxpayer groups): Motion to amend and do pass carried; recorded no votes: Assemblymembers O'Neil, Gray and Hafen/Haven. (Floor statement: Vice Chair Considine.) - AB 535 (sales-and-use tax exemption clarification for 501(c)(3) organizations): Motion to amend and do pass unanimously. (Floor statement: Assemblymember Backus.) - AB 539 (career coaching program): Motion to amend and do pass unanimously. (Floor statement: Assemblymember Flanagan.) - AB 307 (cannabis taxation changes): Moved without recommendation; one recorded no vote (Assemblymember Wynne). (Floor: none specified in transcript.)

The committee’s actions advance each measure to the next stage of floor consideration or further legislative review; assigned floor statements will convey sponsors’ positions to the full Assembly.

Ending: The committee concluded the work session after a public-comment call produced no callers and adjourned.