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Staff: transportation-connection excise tax structure explained; timing quirks drive recent revenue variance

Joint Interim Standing Committee on Revenue (Nevada Legislature) · January 21, 2026

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Summary

Fiscal staff told lawmakers the 3% transportation-connection excise tax is codified in separate NRS sections for TNCs, AVNCs and common carriers, that proceeds primarily flow to the general fund (first $5M per biennium to the state highway fund) and that recent year-to-date variances largely reflect timing and one-time items, including a $5.5M gaming penalty.

Michael Nakamoto, chief principal deputy fiscal analyst with the Legislative Counsel Bureau Fiscal Analysis Division, briefed the committee on the transportation-connection excise tax and recent revenue performance.

Nakamoto summarized that chapter 372B of the Nevada Revised Statutes imposes a 3% excise tax on the fair charge to connect a passenger by a transportation network company, an autonomous vehicle network company (AVNC) or certain common carriers and taxis; the tax is implemented as separate statutory subsections for each service type. “The payment of the tax is made by the company,” Nakamoto said, and the first $5,000,000 of collections in each biennium are dedicated to the state highway fund with the remainder going to the state general fund.

Fiscal staff reviewed historical collections and legislative changes dating to 2015 and noted that state-year collections have trended around $45 million in recent fiscal years. Nakamoto and Susanna Powers also explained that two technical timing shifts explained much of the apparent upside in the year-to-date tally: (1) a one-time acceleration of about $27 million tied to an accounting period change in the Department of Taxation’s transition to a new collections system (Mint) and (2) approximately $75 million of commerce-tax receipts posted to FY26 that originated in FY25 because of filing/timing and a prior cyber incident.

Staff flagged other changes to watch, including AB457-mandated studies the committee will oversee, and committed to sending questions to the Department of Taxation about taxability and specific collection timing issues raised by members. Nakamoto also noted recent non-legislative actions that affected revenues, including a $5.5 million gaming-control-board settlement that was recognized in the state general fund.