This proposed amendment to the Sales and Use Tax Act of 1955 (Act) would authorize the Nevada Legislature to enact legislation amending or repealing any provision of this Act without obtaining additional voter approval whenever that legislation is necessary to carry out any federal law or interstate agreement for the administration, collection, or enforcement of sales and use taxes. The proposed amendment would not authorize the Legislature to enact any legislation that increases the rate of the tax imposed pursuant to this Act, currently 2 percent, without obtaining voter approval.
Additionally, this amendment would repeal an exemption from the taxes imposed by the Act for the sale of aircraft and major components of aircraft to a scheduled air carrier based in Nevada. The language in the Act providing this exemption from the state's portion of the sales and use tax was declared unconstitutional by the Nevada Supreme Court in 1997. Thus, although the language remains in the Act, the exemption is no longer provided to air carriers. The Legislature cannot enact legislation to remove this unconstitutional language from the Act without voter approval. Existing law provides for the administration of sales and use taxes in Nevada pursuant to the Simplified Sales and Use Tax Administration Act, the Sales and Use Tax Act, and the Local School Support Tax Law. The state's portion of the sales and use tax is administered under provisions of the Act that were submitted to and approved by the voters at the 1956 General Election. These provisions cannot be amended or repealed without additional voter approval.
Nevada has entered into the interstate -Streamlined Sales and Use Tax Agreement? to simplify and modernize sales and use tax administration in order to reduce the burden of tax compliance for all sellers and types of commerce. To maintain compliance with the provisions the Agreement, the Legislature may be required to enact legislation amending the Sales and Use Tax Act and the Local School Support Tax Law in response to federal legislation approved by Congress affecting the Agreement or to interstate actions amending the Agreement. The Legislature has the authority to amend the Local School Support Tax Law without voter approval, but the Sales and Use Tax Act cannot be amended without voter approval.