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 herein are: •Chapter 372: Sales and Use Taxes •Chapter 482: Motor Vehicles and Trailers: Licensing, Registration, Sales and Leases 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 Industry The Department of Taxation looks to some of the definitions contained in NRS Chapter 482 for guidance in making determinations of taxability. 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 Industry Laws affecting automobile industry • Trade Ins • Trade down 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 - Sales • NRS 372.025, “Gross Receipts” and NRS 360B.480- what is not included*: Dealer issued discounts Taxes legally imposed on the consumer Drive-away permit costs Optional Warranties Trade-ins * If separately stated 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 •Tire Sales •Smog fees •Doc(ument) fees •Parts Sales •Shop Supplies Automobile Industry-Sales Giveaway cars in casino promotions Transaction between dealership & casino = Nevada sale IF Casino posts contest rules-winner pays tax = Winner paying Casino tax burden = Nevada sale (not eligible as drive-away) 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) 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 NEVADA DEPT OF TAXATION VEHICLE/VESSEL TRADE-IN/TRADE-DOWN SUPPLEMENTAL REPORTING FORM Permit No.: FOR DEPARTMENT USE ONLY Mail Original with your Sales/Use Tax Return Due on or before For month ending TRADE IN RATE COUNTY TRADE IN VALUE 1. County Rate 6.5% Calc Tax @ 4.5% 2. County Rate 6.75% Calc Tax @ 4.75% 3. County Rate 7% Calc Tax @ 5% 4. County Rate 7.125% Calc Tax @ 5.125% 5. County Rate 7.25% Calc Tax @ 5.25% 6. County Rate 7.375% Calc Tax @ 5.375% 7. County Rate 7.5% Calc Tax @ 5.5% Sub Total Less .5% Collection Allowance (A) Total Allowance Subtract (A) from Line 25 of your regular Sales/Use Tax Return TRADE DOWN (use when vehicle/vessel sold is worth less than vehicle/vessel taken in trade) 1. Selling Price of New Vehicle/Vessel 2. Selling Price of New Vehicle/Vessel 3. Selling Price of New Vehicle/Vessel Sub Total Tax @ 2% Less .5% Collection Allowance (B) Total Allowance Add (B) to Line 25 of your regular Sales/Use Tax Return SIGNATURE PHONE NUMBER PRINT NAME FEDERAL ID OR SOCIAL SECURITY NUMBER TITLE DATE NOTE: This form is no longer needed for a VEHICLE tradein; 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%) Automobile Industry - Sales • Unwinds (Returns) – Not Taxable • Repossessions – Taxable • Lemon Law returns - Taxable This form should be in the deal file whenever a repossession occurs. Note this form also includes a notary section. Automobile Industry-Leases • Leases True lease: NAC 372.926(1) Capitalized Cost Reduction First Payment Other advance payments generally are all taxable Automobile IndustryExempt Sales Exempt Sales: – State of Nevada – U. S. Government – Government fees and taxes (title fees) – Religious or charitable organizations (exemption letter needed) – Resale (resale certificate needed) – Out of State (Notarized Drive away affidavit needed or proof of delivery out of state) – Active members of the Nevada National Guard & Family (exemption letter needed) This is the drive away affidavit. It must be completed in full and customer’s signature must be notarized at time of sale. EXEMPT SALES – NEVADA NATIONAL GUARD Nrs 372.7281 provides an exemption to certain members of the Nevada National Guard and their families. • Engaged full time in the Nevada National Guard and who has been called into active service • Exemption passes on to a relative who resides in the same home in this State as the Nevada National Guard member • The relative must be related by blood, adoption or marriage within the first degree of consanguinity or affinity to the member • The member must apply to the Department of Taxation for the exemption • An exemption letter will be issued which defines: -the dates of deployment -the name of the qualifying dependent(s) -the relationship of the dependent to the Nevada National Guard member OUT OF STATE DELIVERY If the vehicle dealer delivers the vehicle to another state for its customer, NAC 372.712 itemizes documents that will substantiate the out of state delivery: • Notarized affidavit signed by purchaser, where notary is not a Nevada notary, taken at the time of delivery • Truck log establishing the trip into another state • Receipts for expenses out of state for meals, lodging, fuel • Tax charged for another state and remitted to that state by the seller • Purchase orders showing how/where the merchandise is to be delivered out of state. MILITARY SALES Sales to Military personnel are generally subject to sales tax. Occasionally a dealer may get this Active Duty Military Governmental Services Tax Exemption Affidavit. NOTE THAT THIS FORM DOES NOT EXEMPT THE TRANSACTION FROM SALES TAX…..it only exempts the Governmental Services tax. 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 • • • • 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 VEHICLES PLACED IN SERVICE FOR USE BY DEALERSHIP When a dealership takes one of its inventory of trucks or vehicles to use as a delivery truck or loaner vehicle, the self-use is subject to use tax on the full cost of the vehicle or truck at the time the truck or vehicle is first placed into such service by the dealership. (NRS 372.185) LOANER PLATES Loaner plates (NRS 482.330) are used on vehicles which are ‘loaned’ to the dealership’s customers while the customer’s vehicle is being repaired. When a dealership takes some of its inventory of vehicles for use as a loaner vehicle, the use is subject to use tax on the full cost of the vehicle at the time the vehicle is first placed into service unless the use is specifically exempted under NRS 372. Other uses of loaner vehicles, such as to the dealer’s immediate family, are subject to use tax at the full cost of the vehicle. DEALER PLATES Dealerships are issued special plates (Dealer Plates) (NRS 482.320) to enable the demonstration and display of vehicles for sale. Personal use of vehicles with dealer plates, such as taking the vehicle home after work, using the vehicle for shopping or entertainment, are not considered “demonstration and display” per NRS 372.185 and are subject to tax on such use. 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 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 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. DEPARTMENT OF TAXATION Contact Information Our offices are open Monday-Friday 8:00 AM – 5:00 PM Contact our Call Center at 1-866-962-3707 Southern Nevada: Grant Sawyer Office Building 555 E. Washington Avenue Suite 1300 Las Vegas, NV 89101 OR 2550 Paseo Verde Parkway Suite 180 Henderson, NV 89074 Carson City: 1550 College Parkway Suite 115 Carson City, NV 89706-7937 Reno: 4600 Kietzke Lane Building L, Suite 235 Reno, NV 89502