Existing law imposes several taxes, known as real property transfer taxes, on each deed by which lands, tenements or other realty are assigned, transferred or otherwise conveyed to, or vested in, another person, or land sale installment contract, if the consideration or value of the interest or property conveyed exceeds $100. The amount of the real property transfer taxes owed is required to be computed on the basis of the value of the transferred real property. (NRS 375.020, 375.023, 375.026) Existing law provides for the disposition and use of the proceeds of the real property transfer taxes for specific purposes, including: (1) deposit in the State General Fund; (2) deposit in the Account for Affordable Housing; (3) deposit in the Local Government Tax Distribution Account for credit to the accounts of each county; (4) deposit in the county school district's fund for capital projects, with respect to proceeds collected in a county whose population is 700,000 or more; and (5) transmittal to the State Treasurer for use by the Division of Plant Health and Compliance of the State Department of Agriculture. (NRS 375.023, 375.026, 375.070) Section 8 of this bill imposes taxes on the sale or transfer of a controlling interest in an entity which possesses, directly or indirectly, an interest in real property in this State when the value of the real property interest exceeds $100. Section 8 imposes the taxes at the same rate as the existing real property transfer taxes and requires the taxes to be computed based on the value of the entity's interest in the real property, which corresponds to the estimated fair market value of the real property. Section 9 of this bill requires the person who receives a controlling interest in an entity which is subject to the tax to file a return and remit the tax to the county recorder of each county in which the entity has a controlling interest in real property on or before the last day of the month immediately following the month in which the sale or transfer was made. Section 11 of this bill requires the county recorder to dispose of the proceeds of the tax in the same manner as the corresponding real property transfer taxes. Sections 11 and 25.5 authorize the county recorder to deduct and withhold from the tax required to be transmitted to the State Controller for deposit in the State General Fund: (1) for the first 5 years after the effective date of this bill, 2 percent of those taxes to reimburse the county for the cost of collecting the tax; and (2) for each year thereafter, 1 percent of those taxes. Section 12 of this bill exempts certain transfers of the controlling interest in an entity from the taxes imposed by section 8. Section 23 of this bill makes it a misdemeanor to willfully falsely declare the estimated fair market value of real property on a return filed pursuant to section 9 and requires the payment of any additional tax required plus a penalty of 25 percent of that amount. Sections 2.5, 3 and 4 of this bill define the terms “controlling interest,” “estimated fair market value” and “taxpayer,” respectively, for the purposes of the provisions governing the taxes imposed by section 8. Section 25 of this bill requires money from the taxes imposed by section 8 which is received by the Division of Plant Health and Compliance to be allocated for disbursement to each county in proportion to the money collected with respect to real property in that county: (1) for use by the State Department of Agriculture for programs on the exclusion, detection and control of invasive species and endemic pests and weeds; and (2) to make grants to local governments and nonprofit organizations for the control or management of such species, pests and weeds. Sections 5-5.7, 10.5, and 24.1-24.18 of this bill provide for the administration and enforcement of the taxes imposed by section 8 in, to the extent applicable, the same manner as the real property transfer taxes.

Statutes affected:
As Introduced: 561.355
Reprint 1: 561.355
BDR: 561.355