AN ACT relating to taxation; providing for the imposition, administration, collection and enforcement of a tax on certain digital products electronically transferred to a purchaser; prohibiting the issuance and use of certain transferable tax credits if money is transferred or allocated from the Account to Stabilize the Operation of the State Government; stating the intent of the Legislature to review the transferable tax credits which the State is authorized to issue under certain circumstance; providing penalties; and providing other matters properly relating thereto.
Sponsored By: Natha C. Anderson (Democratic), Venicia Considine (Democratic)
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Bill Overview
Analyzed Economic Effects
32 provisions identified: 10 benefits, 13 costs, 9 mixed.
Nevada buyers pay digital product taxes
Beginning January 1, 2026, Nevada taxes covered digital products, including digital books, music, videos, games, and subscriptions. The tax covers both permanent and temporary access. The rate matches the combined sales tax rates for physical goods in the county assigned under the law’s location rules. You owe use tax when a taxable purchase is used in Nevada and the sales tax was not collected. You do not pay twice when the applicable tax was already collected.
Unpaid digital taxes bring added charges
The Department of Taxation can estimate tax when a required return is missing or it finds a return unsatisfactory. A determination caused by failure to file adds a 10% penalty, plus applicable interest. Late payments carry a graduated penalty up to 10%, plus 0.75% interest per month or part of a month. The Department can demand a delinquent taxpayer’s money or property held by a third party. That third party generally must stop transfers and report and send the property within 10 days.
Businesses may need tax security deposits
The Department can require security when needed to ensure compliance with the digital tax law. Normal limits are twice estimated average quarterly tax, three times estimated average monthly tax, or four times estimated average annual tax. For habitually delinquent taxpayers, limits rise to three, five, or seven times average actual tax, respectively. The Department can adjust the security within those limits.
Tax evasion brings fines and jail
A person required to file or verify a report commits a gross misdemeanor by filing a false return to evade a legally required determination. Each offense carries a $300 to $5,000 fine, up to 364 days in jail, or both. A false resale certificate is a misdemeanor when used to evade tax despite knowing the products will not be further broadcast, transmitted, licensed, distributed, or exhibited in regular business. Other violations of this digital tax chapter are misdemeanors unless the chapter sets a different penalty.
Businesses face rules for resale exemptions
Sales are presumed taxable, and digital products delivered in Nevada are presumed used there, unless shown otherwise. Businesses can claim resale treatment with a certificate and any required registration or permit. They must intend regular business broadcasting, transmitting, licensing, distributing, or exhibiting to others, or not yet know the intended use. A different first use creates tax liability measured by the purchase price; use tax begins at first storage or use. The seller owes unpaid tax only if it fraudulently failed to collect it or unlawfully sought the certificate.
Digital buyers get state privacy notices
Beginning January 1, 2026, the Department of Taxation must include digital product consumers in its public privacy notice. The notice explains how the State collects, uses, and keeps personal information, including information about tax-exempt buyers. This notice requirement does not itself change the State’s data practices.
Buyers get limits on digital taxes
Beginning January 1, 2026, digital products transferred in sales that qualify as occasional sales are exempt from sales and use tax. Buyers also avoid use tax when the sale receipts must already count toward the law’s digital sales tax. The Tax Commission and Department of Taxation cannot tax transactions that this chapter does not expressly make taxable.
Digital newspaper buyers get tax exemptions
You do not pay this tax on digital newspapers issued, on average, at least once a week. Other publications do not qualify just because they provide news or commentary. The law also exempts transactions that federal law or the U.S. or Nevada Constitution bars Nevada from taxing.
Digital tax relief for Guard households
Full-time Nevada National Guard members called into active service can get an exemption from digital product taxes. Relatives qualify if they share the member’s Nevada home and are related within the first degree by blood, adoption, or marriage. Relatives who shared that home also qualify if the member was killed performing Guard duties during active service. Eligible purchasers must apply for an exemption letter. A deceased member’s relative’s letter expires three years after the member’s death.
Students avoid tax on qualifying textbooks
Covered digital textbooks sold within the Nevada System of Higher Education are exempt from this tax. Other digital products do not qualify just because they are used for education.
Low-volume sellers get less frequent filing
Taxpayers with no more than $10,000 in taxable sales per month generally report and pay quarterly. Quarterly filers switch to annual reporting after three quarters with no tax due or four quarters with sales totaling $1,500 or less. Annual reporting ends when sales exceed $1,500 during that annual period or $10,000 in a calendar month. The Department can require another schedule to ensure payment or make collection easier.
Retailers deduct qualifying unpaid customer debts
Retailers can deduct bad debts meeting the federal section 166 standard, including those not required to file federal returns. The deduction excludes specified interest or finance charges, tax, collection expenses, and unpaid amounts tied to products withheld pending full payment. Retailers must claim the deduction for the period when the debt is written off in their normal business records. Later collections must be reported as taxable in the collection period. Transferring the debt within an affiliated group does not prevent the deduction.
Retailers keep allowance for collecting taxes
Taxpayers making qualifying payments under the law can keep 0.25% of those taxes to cover collection costs. Nevada Tax Commission regulations can authorize a different amount needed to carry out the Streamlined Sales and Use Tax Agreement.
Governments and nonprofits get digital exemptions
Listed federal, Nevada state, and Nevada local government entities are exempt from tax on digital product purchases. Religious, charitable, and educational nonprofits get sales and use tax exemptions for products used in Nevada to further their qualifying purposes. They must operate without profit or private earnings distributions and meet limits on substantial legislative advocacy and political campaign activity. Digital products loaned or donated to listed governments and qualifying religious or charitable organizations are also exempt from use tax. Receiving organizations cannot distribute net earnings to private shareholders or individuals.
Marketplaces get limited tax error relief
A marketplace facilitator avoids liability for underpayments caused by an unaffiliated seller’s wrong information after reasonable efforts to get accurate information. The seller or purchaser remains liable, as applicable. Other errors on sales before January 1, 2026 can qualify for transitional relief, except errors assigning the sale’s location. Transitional relief for 2026 and 2027 is capped at 5% of the facilitator’s relevant tax for each year. Sellers receive relief to the extent the facilitator receives transitional relief.
Buyers owe tax after changing use
A purchaser who certifies an exempt use owes tax if the product is instead used for another purpose. The law treats that different use as a retail sale. The purchaser’s cost becomes the taxable sale amount.
Retailers must show digital taxes separately
Beginning January 1, 2026, retailers collecting digital product tax must show it separately from the product price on receipts. Retailers cannot tell customers they will absorb the tax, leave it off the selling price, or refund amounts charged as tax. Violating either rule is a misdemeanor.
Businesses face records and audit costs
Covered people and businesses must keep required tax records for at least four years if they file required returns. Those who fail to file must keep them for eight years; the Department can allow earlier destruction in writing. Covered taxpayers must reimburse state travel allowances and other actual travel expenses when the Department examines their records outside Nevada. The Department can require reports containing buyer names, addresses, prices, dates, and other requested sales information. Missing required returns or data, or false or fraudulent returns, can bring fines up to $500 per offense.
Digital businesses must register with Nevada
Beginning January 1, 2026, sellers doing business in Nevada must register or obtain a permit; permit applications cost $5. Retailers selling covered products for Nevada use must register and report Nevada agents and business locations. Businesses buying covered products for Nevada use must register when obtaining their state business license. The Department can suspend or revoke noncompliant sellers’ permits after a hearing and 10 days’ written notice. Reinstatement or a new permit costs $5.
Retailers face bad-debt deduction penalties
A retailer’s first return violating the bad-debt deduction rules receives a warning. The first or second later violating return in a calendar year costs the deduction claimed, capped at $1,000. A third or later violating return costs three times the deduction claimed, capped at $3,000. If an audit finds the retailer’s first violation across multiple returns, all affected returns receive warnings.
Retailers face county tax reporting penalties
Covered returns must separate sales receipts or purchase prices by county under the sale, delivery, or first-use location rules. A retailer’s first violating return receives a warning. The first or second later violating return in a calendar year carries a penalty capped at $1,000. A third or later violating return costs three times the unreported or wrongly assigned tax, capped at $3,000. When an audit finds the retailer’s first violation across multiple returns, all affected returns receive warnings.
Retailers must collect and safeguard taxes
Retailers with a Nevada business location must collect tax on nonexempt digital products sold for Nevada use. Collection occurs at sale, or when a previously untaxed use becomes taxable, and purchasers must receive receipts. Collected taxes are owed to Nevada and must stay in a separate account held in trust for the State. Taxes are calculated to three decimal places and rounded to cents, rounding up when the third decimal exceeds 4. Retailers can calculate tax by item or for the whole transaction on one invoice.
Marketplaces must collect Nevada sales taxes
Marketplace facilitators must collect and remit Nevada taxes after exceeding $100,000 in relevant Nevada sales or reaching 200 transactions. The threshold counts physical goods and covered digital products. Collection duties apply in the threshold year and the following calendar year. A marketplace seller can take responsibility through a written agreement if it has the required permit or registration.
More retailers must collect Nevada taxes
Retailers with a constitutionally sufficient connection to Nevada must follow the law’s tax requirements. Remote retailers qualify with more than $100,000 in Nevada sales or at least 200 transactions in the current or preceding year. The thresholds count physical goods and covered digital products. A retailer is also presumed covered when a related group member has Nevada physical presence and significantly supports its Nevada market. Paid Nevada referrals exceeding $10,000 in sales over the preceding four quarters create another presumption; both presumptions can be rebutted with proof of no significant Nevada market support.
Taxpayers get refunds with some limits
After State Board of Examiners approval, duplicate or wrongly collected payments first cover amounts owed; the balance is refunded. Purchasers seeking State relief for use tax overpaid to a retailer required to collect it need the retailer’s receipt. Refund claims generally must be filed within three years after the last day of the month following the overpayment period. Overpayments earn 0.25% monthly interest, starting on that last day and ending under the refund or credit rules. For the specific use exemption in section 53, claimants must reimburse the vendor for sales tax it paid Nevada before receiving relief.
Retailers gain protection with exemption records
Retailers must collect required exemption information, keep records, and provide them when the Department requests them. A compliant retailer generally avoids liability for a purchaser’s improper exemption claim; the purchaser remains liable. Protection does not cover fraud, unlawful solicitation, or specified organization-based claims covered by a Department warning. The Department must provide an electronic exemption-request system to the extent feasible.
Counties receive locally assigned digital taxes
Nevada distributes digital product tax payments through General Fund sales and use tax accounts in matching proportions. Certain receipts follow a new rule instead of the existing allocation rules. Those receipts go to the county where the digital sale is legally treated as taking place. This changes where public money goes, not the tax buyers or sellers owe.
Credit holders face fiscal emergency freezes
Beginning July 1, 2025, these restrictions cover transferable credit programs authorized by legislation enacted on or after that date. They require an approved Rainy Day Fund transfer or legislative allocation, plus a declared fiscal emergency. The Legislature declares the emergency, or, when it is not in session, the Interim Finance Committee and Governor do. Agencies cannot issue covered credits for the rest of that fiscal year and the following fiscal year; existing credits cannot offset state or local taxes. Existing credits’ expiration dates are extended by the number of days they cannot be used.
Marketplace protections limit buyers’ tax claims
The law bars private lawsuits and remedies against marketplace operators under its marketplace tax rules. Operators required to collect tax are also protected from civil overpayment claims when acting in good faith and without malicious intent. Taxpayers keep their statutory right to seek a refund. The Department of Taxation keeps its enforcement authority.
Nevada advertising brings tax enforcement rules
For tax enforcement, qualifying advertising businesses count as the advertiser’s agent and as retailers with a Nevada business location. This covers paid commercial ads distributed in Nevada, aimed mainly at Nevada residents and only secondarily at neighboring residents. The advertising business has no duty to report or pay the tax under this rule.
Nonprofits need renewable tax exemption letters
Qualifying organizations must apply to the Department of Taxation for a nonprofit exemption letter. Approved letters last five years and can be renewed for another five years. Organizations must give retailers a copy to claim an exempt sale. Retailers must keep the copy and provide it to the Department on request.
Referrers face collection or notice duties
The Department can adopt rules requiring qualifying sales referrers to collect and remit Nevada taxes. Rules can cover referrals generating more than $100,000 in Nevada sales or at least 200 transactions during a calendar year. They can also cover the following year. Referrers must receive an exemption if they provide buyer notices, monthly seller notices, required electronic reports, and an officer’s affidavit confirming reasonable compliance efforts.
Sponsors & Cosponsors
Sponsors
Natha C. Anderson
Democratic • House
Venicia Considine
Democratic • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
Actions Timeline
(No further action taken.)
6/3/2025HouseTo committee.
4/24/2025HouseFrom printer. To engrossment. Engrossed. First reprint.
4/24/2025HouseTo printer.
4/21/2025HouseRereferred to Committee on Ways and Means. Exemption effective.
4/21/2025HouseTaken from General File.
4/21/2025HouseRead second time. Amended. (Amend. No. 470.)
4/21/2025HousePlaced on Second Reading File.
4/21/2025HouseFrom committee: Amend, and do pass as amended.
4/21/2025HouseNotice of eligibility for exemption.
3/27/2025HouseFrom printer. To committee.
3/19/2025HouseRead first time. Referred to Committee on Revenue. To printer.
3/17/2025House
Bill Text
As Introduced
Reprint 1
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