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Recently, the Nevada Supreme Court ruled that Nevada businesses are not liable for paying sales and use taxes on food served to customers or employees free of charge. In the particular case, a hotel and casino in Nevada regularly purchased large quantities of unprepared food to supply their various restaurants. The resort therefore, pays no sales tax on those purchases under the unprepared food exemption. Once the food was prepared, some of it was sold to customers (and taxed appropriately) and some was provided as complimentary meals to customers and employees. The resort erroneously paid use tax on the portion that was given away and subsequently filed a refund claim. The Court agreed with the taxpayer’s argument and was granted the refund based on the fact that from the point the unprepared food was purchased until the point where the complimentary meals were served no taxable action took place. (Sparks Nugget, Inc. v. The State of Nevada, Nevada Supreme Court, No. 45755, March 27, 2008)


Governor Jim Gibbon’s tax amnesty proposal has been unanimously approved by the Nevada Tax Commission. Effective July 1, 2008 through September 30, 2008, the program will apply to sales and use tax, modified business tax and business license fees. Taxpayers will have the opportunity to pay taxes they owe to the state without penalties or interest. The Governor is scheduled to sign the emergency regulation later this month. (Press Release, Office of the Governor, June 2, 2008)


Exemptions relating to farm machinery and vehicle trade-ins were recently approved by Nevada voters. The new amendment to the Nevada Sales and Use Tax Act exempts from state and local tax the “value of any used vehicle taken in trade on the purchase of another vehicle” as well as “the value of farm machinery and equipment.” Both exemptions take full effect on January 1, 2007. (Nevada Ballot Question 8, approved by voters on the November 7, 2006 general election)


This exemption was passed during the 2003 Legislative Session by way of Senate Bill No. 313. The lease exemption is only for motorized vehicles. (Nevada Tax Notes, No. 145, January 2004.)


The new sales tax collection allowance is .5% from 1.25% effective July 1, 2003. (Nevada Tax Notes Issue No. 145.)



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