• Abstract and Figures
• Public Full-text

MINUTES OF THE MEETING OF THE ASSEMBLY COMMITTEE ON TAXATION Eightieth Session February 28, 2019 The Committee on Taxation was called to order by Chair Dina Neal at 4:05 p.m. on Thursday, February 28, 2019, in Room 4100 of the Legislative Building, 401 South Carson Street, Carson City, Nevada. The meeting was videoconferenced to Room 4401 of the Grant Sawyer State Office Building, 555 East Washington Avenue, Las Vegas, Nevada and to Room 125, McMullen Hall, Great Basin College, 1500 College Parkway, Elko, Nevada. Copies of the minutes, including the Agenda (Exhibit A), the Attendance Roster (Exhibit B), and other substantive exhibits, are available and on file in the Research Library of the Legislative Counsel Bureau and on the Nevada Legislature's website at www.leg.state.nv.us/App/NELIS/REL/80th2019. COMMITTEE MEMBERS PRESENT: Assemblywoman Dina Neal, Chair Assemblywoman Lesley E. Cohen, Vice Chair Assemblywoman Shea Backus Assemblywoman Teresa Benitez-Thompson Assemblyman Chris Edwards Assemblyman Edgar Flores Assemblyman Gregory T. Hafen II Assemblyman Al Kramer Assemblywoman Susie Martinez Assemblywoman Ellen B. Spiegel Assemblywoman Heidi Swank COMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: Assemblywoman Robin L. Titus, Assembly District No. 38 Minutes ID: 448 *CM448* Assembly Committee on Taxation February 28, 2019 Page 2 STAFF MEMBERS PRESENT: Russell Guindon, Principal Deputy Fiscal Analyst Michael Nakamoto, Deputy Fiscal Analyst Bryan Fernley, Committee Counsel Gina Hall, Committee Secretary Olivia Lloyd, Committee Assistant OTHERS PRESENT: Randi Thompson, representing Nevada Firearms Coalition Political Action Committee Debbie Block, President and Founder, Reno Guns and Range, Reno, Nevada Kile Porter, Deputy Executive Director, Administrative Services, Department of Taxation Shellie Hughes, Chief Deputy Executive Director, Department of Taxation Danielle M. Kohler, Owner, Arms-R-Us LLC, Deeth, Nevada Daniel S. Reid, Western Regional Director, National Rifle Association of America Amber Carrillo, Owner and Primary Instructor, Integritas, Inc., Gardnerville, Nevada Janine Hansen, State President, Nevada Families for Freedom Bryan Wachter, Senior Vice President, Retail Association of Nevada Michael Findlay, Director, Government Relations and State Affairs, National Shooting Sports Foundation, Inc. Ryan Black, Legislative Liaison, Office of Administrative Services, City of Las Vegas Chair Neal: [Roll was taken and Committee rules and protocol were reviewed.] I will open the hearing on Assembly Bill 113. Assemblywoman Titus, please come to the table. Assembly Bill 113: Revises provisions governing the taxation of certain deliveries and transfers of firearms. (BDR 32-659) Assemblywoman Robin L. Titus, Assembly District No. 38: Thank you for hearing my bill today, Assembly Bill 113. Here at the table with me today are Randi Thompson from the Nevada Firearms Coalition and Debbie Block from Reno Guns and Range. The purpose of A.B. 113 is to clarify that the Department of Taxation shall not consider the delivery or transfer of a firearm from outside the state by a person in this state who is a federally licensed firearms dealer to be a sale made by the federally licensed firearms dealer, if: 1. The delivery or transfer is made to facilitate the transfer of the firearm from outside the state in compliance with a federal law. Assembly Committee on Taxation February 28, 2019 Page 3 2. The sale involves the payment of the sales price for the firearm to a person other than the federally licensed firearms dealer. Current federal law prohibits a person from transporting into or receiving in a state other than their residence a firearm purchased or otherwise obtained by that person from outside that state. That is current federal law. They can only do that if they are licensed by the Bureau of Alcohol, Tobacco, Firearms and Explosives. We refer to those individuals as federally licensed firearms dealers. You will frequently hear them referred to as FFLs [Federal Firearms License]. There are currently approximately 781 FFL dealers in Nevada. Unlike in the old days when you would buy a Winchester rifle from the Sears catalog and you expected it to be delivered out to your ranch somewhere, that is not how that works anymore. Prior to transferring or delivering the firearm to the purchaser, the FFL must conduct a background check required by federal law. Only after the purchaser passes the background check may that purchaser take possession of the firearm. The issue that has occurred is that the Department of Taxation has considered the delivery of the firearm in Nevada a retail sale, and the Nevada retailer must collect and remit sales tax on the purchase of the firearm, thereby forcing the purchasers to pay taxes at the time of the original purchase and then be taxed again when they take possession. Assembly Bill 113 is intended to prevent double taxation. To make matters worse, the retail value of the firearm is considered to be a sale and counts towards a store's or retailer's gross receipts. With the passage of the commerce tax, not only is the purchaser paying twice but the retailer is subject to a tax upon his gross receipts for a sale he did not make. I would now like to go through the bill. It is a short bill and is only one page. When you look at the bill it seems like it repeats itself, and there is a reason for that. Section 1 covers Chapter 372 of Nevada Revised Statutes (NRS), and that is the chapter that imposes the actual sales tax. The wording is needed again in section 2 because that would amend NRS Chapter 374, and that chapter imposes the local school support tax (LSST) and also covers other local sales taxes, which is why the same wording had to be repeated. In conclusion, A.B. 113 is beneficial to both consumers and businesses. I appreciate your time and am happy to answer any questions. If you have questions now, great; if not, we can have Ms. Thompson and Ms. Block give their statements. Chair Neal: Are they presenting on portions of your bill or just to offer support? Assemblywoman Titus: They are here to offer clarification, both from a gun owner and a firearms dealer. Assembly Committee on Taxation February 28, 2019 Page 4 Chair Neal: We will hear from them before questions. Randi Thompson, representing Nevada Firearms Coalition Political Action Committee: I will say ditto to what Assemblywoman Titus just said, and also that this is the third time we have come before this body with this fix. Daniel Reid from the National Rifle Association of America and I met with the Department of Taxation after 2017 to try to get some clarification that this is not a sale, it is a transfer. We were not successful with that, so we are back to you again. If you have seen the Tax Bulletin SUT 15-0001 (Exhibit C), it says the delivery of a firearm in Nevada is a retail sale and the Nevada retailer must collect and remit sales tax on the purchase of the firearm. It also says the gun store must include the retail sale as part of its gross receipts, and that a gun store can charge a fee or a service for this service, but those fees and service charges are subject to taxation. So, if I wanted to buy a gun from Ms. Block, and she lived in California, that is where the sale transaction happened. The gun is then sent to a store, and that is where I go down and pass the background check. Once that is done, I pick up my gun. So, if I bought a firearm online and it was sent to my home, United Parcel Service or Federal Express does not collect the tax. The person who sold it is generally supposed to pay the tax. There is confusion here. This is one of those occasions in which this is the only type of item subject to this tax. I would like Debbie Block, who owns Reno Guns and Range, to explain how this is affecting the business, and hopefully she can answer some of your questions. Debbie Block, President and Founder, Reno Guns and Range, Reno, Nevada: For transferred firearms, Nevada requires us to report that as a sale, one we do not actually sell but we do facilitate the transfer of. There are several problems with this, but first I want to point out that this bill should also apply to in-state transfers. In other words, it should apply to all transfers. Now for the issues. The Internal Revenue Service does not treat this type of transaction as a sale so our state and federal revenue numbers do not match. The procedure Nevada currently requires causes us to inflate our sales. These transactions increase our gross sales and count toward a gross receipts tax. We technically do not sell a transferred firearm or a transferred item. We simply transfer it. We are just managing the transaction. We must now report the sale we did not receive. We do not receive tender of the price for that item. We understand the desire to collect sales tax on these transactions, but our business is disadvantaged by doing so. No other business in our industry is required to do such a thing. At the very least we would like to be able to list these transactions separate from our sales, which would certainly help to some degree. We obviously will not be compensated for collecting sales tax for the state, which takes additional resources on our part, but we do need a fix for the overtaxation of nonsales going through our businesses. Assembly Committee on Taxation February 28, 2019 Page 5 Assemblywoman Spiegel: I am trying to get a sense of the scope of this issue.

Load more

  15

Copy Link