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STATE OF NEVADA DEPARTMENT OF TAXATION Automotive Industry LAWS GOVERNING AUTO INDUSTRY Two of the main chapters of the Nevada Revised Statutes and Nevada Administrative Code discussed today are: Chapter 372: Sales and Use Taxes Chapter 482: Motor Vehicles and Trailers:

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Presentation Transcript
laws governing auto industry
LAWS GOVERNING AUTO INDUSTRY

Two of the main chapters of the Nevada Revised Statutes and Nevada Administrative Code discussed today are:

  • Chapter 372: Sales and Use

Taxes

  • Chapter 482: Motor Vehicles and Trailers:

Licensing, Registration, Sales and Leases

Also referenced will be chapter 374, Local School Support Tax

automobile industry
Automobile Industry

The Department of Taxation administers the sales/use tax laws and regulations while the Department of Motor Vehicles (DMV) administers laws and regulations governing the licensing, selling, titling and other related issues involving vehicles which are required to be

licensed to drive on a public highway

(NRS 482.135)

automobile industry5
Automobile Industry

The Department of Taxation looks to some of the definitions contained in NRS Chapter 482 for guidance in making determinations of taxability.

automobile industry6
Automobile Industry

Some useful sources of information can be found at:

DMV main website: http://www.dmvnv.com/index.htm

DMV Registration/Title Guide: http://www.dmvnv.com/pdfforms/regtitle.pdf

Department of Taxation: http://www.tax.state.nv.us

Statutes and Nevada Administrative Code at http://www.leg.state.nv.us/law1.cfm

automobile industry7
Automobile Industry

Laws affecting automobile industry

  • Trade Ins
  • Trade down
  • Dealer Special Plates – they are gone
automobile industry sales
Automobile Industry - Sales
  • NRS 372.025, “Gross Receipts” is a primary statute describing what is included in gross receipts and what is not included:
  • Included

All receipts, cash, property

Manufacturer’s discounts, or rebates

Mandatory warranties

Services that are part of the sale

automobile industry sales9
Automobile Industry - Sales
  • NRS 372.025, “Gross Receipts” - what is not included:

Dealer issued discounts

Luxury Tax imposed by the U.S.Government

Drive-away permit costs

Optional Warranties

automobile industry sales10
Automobile Industry-Sales
  • Sales to Military: Generally taxable
  • Sales to Students: Generally taxable
  • Sales to Native Americans: Generally taxable
  • Sales to Snowbirds:Sometimes taxable
  • Sales to Active Nevada National Guard members:Generally exempt
automobile industry taxable sales
Automobile Industry – Taxable Sales
  • Tire Sales
  • Smog fees
  • Doc(ument) fees
  • Parts Sales
  • Repairs
  • Shop Supplies
automobile industry sales12
Automobile Industry-Sales

Giveaway cars in casino promotions

  • Transaction between dealership & casino

= Nevada sale

  • Casino posts contest rules-winner pays tax

= Winner paying Casino tax burden

= Nevada sale

automobile industry sales13
Automobile Industry - Sales

Trade-Ins are reportable at full county tax rate (Clark County = 8.1% as of 7/1/2009)

Trade-Downs (Trade-in allowance reportable limited to amount of new vehicle purchase) (Example: New vehicle purchase: $15,000

Trade-down amount: $20,000. Trade-in allowed on sales/use tax return = $15,000)

slide14

NOTE: This form is no longer needed for a VEHICLE trade-in; however, trade-in of a vessel will require use of this form.

Trade-ins of vessels do not get the full tax credit; in using this form to record a vessel trade-in, use the full county tax rate less 2%. (Example: Clark County full tax rate as of 7/1/2009 is 8.1%. Vessels trade-in tax rate is 6.1%)

Gone!

trade in transaction
Trade-In Transaction
  • Current reporting requirements

…………..as of 1/1/2007

Trade-In Transaction:

Car sale……………………………………………….$20,000

report in Column A of sales tax return

Trade-in……………………………………………….$10,000

report in Column B of sales tax return

trade down transactions
Trade-Down Transactions
  • Reporting requirements

………………..as of 1/1/2007

Trade-DownTransaction:

Car sale……………………………………………….$20,000

report in Column A of sales tax return

Trade-in……………………………………………….$25,000

report only $20,000 in Column B of sales tax return

automobile industry sales17
Automobile Industry - Sales
  • Unwinds – Not Taxable
  • Repossessions – Taxable
  • Lemon Law returns - Taxable
automobile industry leases
Automobile Industry-Leases
  • Leases

True lease: NAC 372.070(1)(2)

Capitalized Cost Reduction

First Payment

Other advance

payments all taxable

automobile industry exempt sales
Automobile Industry-Exempt Sales

Exempt Sales to:

  • State of Nevada
  • U. S. Government
  • Government fees (title fees, luxury tax)
  • Religious or charitable organizations
  • Resale
  • Out of State
  • Active members of the Nevada National Guard & Family
nevada residents are not allowed drive away permits
Nevada residents are not allowed Drive-away permits
  • Beware of Drive-away permits to these states
  • Oregon
  • Montana
  • Delaware
  • Alaska
  • New Hampshire
automobile industry use tax
Automobile Industry – Use Tax
  • Giveaway items
  • Self-use items purchased ex-tax
  • Internet ex-tax purchases for self use
  • Vehicles placed in service for

use by dealership

  • Parts for company vehicles
records to be kept
RECORDS TO BE KEPT
  • Purchase invoices
  • Sales journals
  • General ledgers
  • Deal files
  • Affidavits and Drive–away permits

Must keep records for four (4) years

electronic filing requirements
Electronic Filing Requirements
  • Effective July 1, 2008…..

All payments of money for taxes, interest, penalties or other obligations in the aggregate amount to $10,000 or more MUST be made by electronic transfer….*

For more information and to register and pay your taxes, go to:

http://www.nevadatax.nv.gov/web

*SB 517, 2007 Legislative Session

written response
Written Response

Most tax issues can be addressed by the Department of Taxation. Please be advised that any responses to inquires made to the Department are only binding if put in writing, such as Nevada Revised Statutes, Administrative Code, Nevada Tax Notes, or in written correspondence.