Has your company registered for the Commerce Tax? If so, you’ve obeyed the law, but you’ve also put yourself at risk unnecessarily. This tax was passed by the 2015 Legislature, supposedly to help fund education, and it applies to every company doing business in Nevada whose gross receipts are $4 million or more. However, every single business in Nevada, regardless of whether they owe the tax, is required to register for it with the Department of Taxation (DOT). According to the DOT website, this includes every mom and pop company in the state, anyone who receives a 1099-misc as an independent contractor, anyone receiving rental income, and all corporations registered in Nevada, even those that have no activity and zero income.
If you haven’t filled out the registration form, officially called the Commerce Tax Additional Information Form, you can view it on the DOT website (tx.nv.gov). Front and center, it asks for the name of a “responsible person” at the company, who must supply their Social Security number in order to complete the form. The Nevada Taxpayers Association, on behalf of its members, wrote a letter to the Department of Taxation in June pointing out that this requirement violates not only NRS 239B.030(1), but also the Nevada Taxpayers’ Bill of Rights, which was created in cooperation with the DOT.
NRS 239B.030(1) states that “…a governmental agency shall not require a person to include any personal information about a person on any document that is recorded, filed or otherwise submitted to the governmental agency on or after January 1, 2007.” And the Taxpayers’ Bill of Rights states, “The Department [of Taxation] is mandated to ask only for information that it needs to do its job, and no more. All forms prepared by the Department ask for a minimum of information…”
There’s no way that the DOT needs the Social Security number of a person at each and every business filing for the Commerce Tax. Any business registered with the Secretary of State has already provided information about “responsible persons,” including name, address, phone, and Social Security number. If a company is delinquent in paying its Commerce Tax, the DOT can get information from the Secretary of State in order to track down an individual, if that becomes necessary. Meanwhile, the remaining 99 percent of businesses are being required to provide personal information on the registration form for no valid reason.
What’s the objection to this? First of all, it’s unlawful. Without getting a specific exemption from the Legislature that allows it to collect this information, DOT is in violation of Nevada statutes. It also requires thousands of companies to reveal personal information about their owners and employees, including Social Security numbers – information that puts individuals at risk in case of a data breach. Despite DOT assurances, data breaches occur all the time. The State Department, the federal Office of Personnel Management and even the White House have been hacked. Why require Nevada business people to risk identity theft for no apparent reason?
Call to Action: The 2017 session of the Nevada Legislature begins this month, so business people have only 120 days to express their concerns and lobby for business-friendly bills. If you’re concerned about this issue, contact your legislator and ask for a bill that directs the Department of Taxation to remove its requirement that Social Security numbers be included on the Commerce Tax Additional Information Form. Don’t let this session pass without taking action on issues like this one that concern you and your company.
2 Chronicles 7:14 (NKJV) “If my people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”
By Whose Authority?
For more information on my Commentary and to see some of my backup research, or if you wonder why I take the position I take, go to www.LyleBrennan.com
