The Nevada Taxation Department has mailed every business in the state forms to use in paying the new modified business tax.
The new taxes were imposed by Senate Bill 8, approved by the 2003 Legislature and went into effect Oct. 1. The first quarterly returns are due Jan. 31.
Taxation Director Chuck Chinnock advised businesses to use the new forms and the envelopes mailed to them when they return the taxes to the state because they are coded. And he said the tax is separate from the quarterly payroll assessment to the Employment Security Division.
The modified business tax imposes a 0.7 percent levy on gross wages paid to each worker each quarter. That drops to 0.65 percent next July.
For financial institutions, the tax is 2 percent of gross wages. But in both bases, businesses can lower the amount they owe the state by deducting what they pay for employee health insurance and benefit programs.
The business tax is a key element of the revenue package developed by Gov. Kenny Guinn and the Nevada Legislature. It replaces the business license tax of $100 per employee per year.
Because the tax is a percentage rather than the flat amount charged under the business license tax, businesses paying less than $7.40 an hour would see a decrease in their tax per worker. Those paying higher wages would pay more than they do now.
The tax on financial institutions is expected to generate about $36.9 million over the two-year budget cycle.
When the amounts now generated by the repealed business license tax are deducted, the tax on all other businesses is expected to add some $176.8 million to total state revenues over the next two years.
