Nevada Sales Tax Enforcement Actions Checklist

Nevada Sales Tax Enforcement Actions Checklist

Understanding Enforcement Notices

A Nevada sales tax enforcement notice is a formal written document issued by the Nevada

Department of Taxation when your business fails to file required returns, has unpaid sales tax obligations, or does not comply with state tax requirements. This notice represents a shift from routine reminders to active state collection efforts.

State law establishes specific procedures for these enforcement actions under Nevada Revised

Statutes, and the Department administers all state sales tax matters through this framework.

Ignoring these notices typically results in additional penalties, increased interest charges, and more serious collection measures, including liens, levies, or permit suspension.

Why the State Issues These Notices

The Department issues enforcement notices to address compliance gaps and collect unpaid revenue. Common triggers include businesses that have not filed sales tax returns within required timeframes, unpaid sales tax from filed returns or audit assessments, businesses operating without valid permits, repeated failure to file or pay despite prior notices, and suspected non-reporting of taxable sales.

Standard collection procedures incorporate these actions as routine administrative measures.

When voluntary compliance measures such as reminder notices fail to produce results, the

Department escalates to formal enforcement.

Potential Consequences of Non-Response

Ignoring a Nevada sales tax enforcement notice leads to escalated collection measures. The

Department may issue additional demands for immediate payment, record a certificate of delinquency creating a lien against business assets or personal property within four years after tax became due, issue a warrant for collection allowing levy of bank accounts or garnishment of business income, or suspend your sales tax permit under procedures specified in Nevada law.

What the Notice Does Not Mean

Receiving an enforcement notice does not automatically indicate that a criminal investigation has been launched against your business or you personally. Your business will not be immediately closed or assets seized without further process, and you are not automatically personally liable as an owner.

The notice serves as a collection and compliance tool under civil tax administration. Payment in full is not necessarily due within days without any negotiation opportunity, and formal procedures remain in effect throughout the process.

Response Steps After Receiving Notice

Review the entire notice carefully and identify all deadlines, contact information, case numbers, and tax periods mentioned. Write down these details and keep the original notice in a secure location.

Verify the accuracy of information by comparing the notice claims against your records of filed returns, payments made, and business operations for the periods in question. Document any discrepancies between what the notice states and what your records show.

Gather all relevant documentation, including copies of sales tax returns filed for the questioned periods, proof of payment through bank statements or electronic confirmations, receipts and invoices showing taxable and non-taxable sales, and registration documents if permit issues are involved.

Contact the Department before the deadline stated in the notice. Have your notice number, business name, and tax identification number available when calling. Ask about deadlines, available payment options, and formal dispute procedures. Request written confirmation of any information provided verbally during your conversation.

Understanding the Formal Appeal Process

Nevada provides a detailed statutory appeal process for contesting deficiency determinations.

You have forty-five days from the date of the Deficiency Determination or Notice of Credit to file a Petition for Redetermination with the Nevada Department of Taxation.

Several stages comprise the formal process. First, engage in an informal discussion with the auditor or revenue officer handling your case to understand the basis for the assessment.

Second, request supervisor review if questions remain after initial discussion.

Third, file your Petition for Redetermination within the forty-five-day statutory deadline. A

Department supervisor reviews the petition and may return the case for additional consideration if you present new evidence.

An Administrative Hearing occurs before an Administrative Law Judge if disagreement persists.

You may appeal to the Nevada Tax Commission within thirty days of the Administrative Law

Judge decision. Finally, you may pursue a district court appeal within thirty days if you disagree with the Nevada Tax Commission decision.

Penalties and Interest Structure

Nevada applies a graduated penalty scale for late payments filed within thirty days of the due date. The penalty ranges from 2% to 10% based on the number of days the payment is late.

Payments up to ten days late incur a two percent penalty, eleven to fifteen days late incur four percent, sixteen to twenty days late incur six percent, twenty-one to thirty days late incur eight percent, and more than thirty days late incur ten percent.

Interest accrues at 0.75% per month, or a fraction thereof, on unpaid tax balances. This interest runs from the last day of the month following the period during which the amount should have been reported until the payment date.

Additional penalties apply for specific violations. Deficiencies resulting from negligence or intentional disregard of statutes or regulations carry an extra 10% penalty, while deficiencies resulting from fraud or intent to evade payment carry an additional 25% penalty.

Payment Arrangements and Relief Options

The Nevada Department of Taxation may enter written installment agreements for delinquent taxes, fees, interest, or penalties. These agreements allow you to pay obligations over time when immediate full payment creates hardship.

You may request a waiver or reduction of penalties and interest if your failure to file or pay timely resulted from circumstances beyond your control. Submit a signed statement under penalty of perjury explaining the facts supporting your relief request.

Critical Action Requirements

Submit your response before the deadline stated in the notice, whether you are disputing the assessment, requesting a payment plan, or making a payment. Send responses by mail or hand-delivery according to notice instructions and keep copies of everything you submit.

If you do not receive written acknowledgment within ten to fifteen business days, contact the

Department again. Reference your prior submission date and notice number during follow-up communication.

Comply with all terms if you establish a payment plan or agreement with the Department. Make payments by the specified dates and keep records of all payments made. Contact the

Department immediately if circumstances change and you cannot meet the agreement terms, rather than assuming the agreement will cancel automatically.

Facing State Tax Enforcement Action?

If you’ve received a notice related to sales tax or payroll tax enforcement, and aren’t sure how to respond, our team can help you understand your options and next steps.