(Reprinted with amendments adopted on April 17, 2025)
FIRST REPRINT S.B. 196
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SENATE BILL NO. 196–SENATOR CANNIZZARO
FEBRUARY 10, 2025
____________
Referred to Committee on Revenue and
Economic Development
SUMMARY—Authorizes a heavy equipment rental company to
charge a recovery fee to offset taxes levied on certain
heavy equipment. (BDR 32-19)
FISCAL NOTE: Effect on Local Government: May have Fiscal Impact.
Effect on the State: Yes.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to taxation; providing for the imposition,
administration, collection and enforcement of a recovery
fee to offset property taxes levied on certain heavy
equipment; providing penalties; and providing other
matters properly relating thereto.
Legislative Counsel’s Digest:
Under existing law, all property of every kind and nature in this State is subject 1
to property taxes unless the property is exempt from such taxation. (NRS 361.045) 2
In general, this bill authorizes a heavy equipment rental company that is primarily 3
engaged in the business of renting heavy equipment, without an operator, from a 4
location in this State to charge a recovery fee to offset the property taxes levied on 5
such heavy equipment. Under existing regulations, such a recovery fee would be 6
excluded from the sales or use tax charged for the rental of the heavy equipment. 7
(NAC 372.940) 8
Section 13 of this bill authorizes such a heavy equipment rental company to 9
charge a recovery fee in an amount not to exceed 2 percent of the rental charge for 10
the rental of the heavy equipment. Under section 13, a heavy equipment rental 11
company that charges a recovery fee is required to: (1) separately state on the 12
invoice provided to the renter the amount of the recovery fee charged to the renter; 13
(2) hold the recovery fee in a separate account; and (3) use the proceeds of the 14
recovery fee to offset the property taxes levied on heavy equipment rental property. 15
Section 14 of this bill exempts from the charging of a recovery fee the rental of any 16
heavy equipment rental property to certain governmental entities. 17
Section 15 of this bill requires a heavy equipment rental company to submit to 18
the Department of Taxation an annual report stating the amount of the recovery fees 19
collected by the heavy equipment rental company during the immediately 20
preceding fiscal year and the amount of the property taxes levied on the heavy 21
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equipment rental property of the heavy equipment rental company for the 22
immediately preceding fiscal year. 23
Sections 4-10 of this bill define certain terms relating to the imposition of the 24
recovery fee on the rental of heavy equipment rental property. Section 3 of this bill 25
establishes the applicability of those definitions. 26
Sections 11 and 12 of this bill establish provisions governing the retention and 27
examination of records relevant to the recovery fee. Section 16 of this bill provides 28
that a person who submits a false or fraudulent report concerning the recovery fee 29
or falsifies entries in or keeps more than one set of books, records or accounts, with 30
intent to defraud in violation of the requirement to use the recovery fees only to 31
offset property taxes, is guilty of a gross misdemeanor. 32
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. (Deleted by amendment.) 1
Sec. 2. Chapter 361 of NRS is hereby amended by adding 2
thereto the provisions set forth as sections 3 to 16, inclusive, of this 3
act. 4
Sec. 3. As used in sections 3 to 16, inclusive, of this act, 5
unless the context otherwise requires, the words and terms defined 6
in sections 4 to 10, inclusive, of this act have the meanings 7
ascribed to them in those sections. 8
Sec. 4. 1. “Affiliate” means a person who, directly or 9
indirectly, through one or more persons or intermediaries, 10
controls, is controlled by or is under common control with a 11
specified person. 12
2. As used in this section, “control” means: 13
(a) Direct or indirect ownership, control or possession of 50 14
percent or more of the equity ownership of a person; or 15
(b) Possession, direct or indirect, of the power to direct or 16
cause the direction of the management and policies of a person, 17
whether through the ownership of voting securities, by contract or 18
through other means. 19
Sec. 5. 1. “Heavy equipment rental company” means a 20
person who is classified under 532412 or 532310 of the North 21
American Industry Classification System, and is primarily 22
engaged in the business of renting heavy equipment rental 23
property, without an operator, to the public from a location in this 24
State. 25
2. The term does not include a person who is: 26
(a) Engaged in the business of renting heavy equipment rental 27
property primarily to related persons or affiliates who operate or 28
drive, or both operate and drive, such equipment, regardless of the 29
NAICS code that applies to the business; or 30
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(b) Primarily engaged in the business of renting heavy 1
equipment rental property with an operator. 2
Sec. 6. “Heavy equipment rental property” means property, 3
machinery and equipment held in the inventory of a heavy 4
equipment rental company for sale or rental in the regular course 5
of business. The term includes, without limitation, property, 6
machinery and equipment that is customarily used or designed for 7
construction and industrial purposes, including, without 8
limitation, earthmoving equipment, lift equipment, material 9
handling equipment, pumps, generators, compressors, portable 10
power equipment, heating, ventilation and air conditioning 11
equipment, portable offices, containers, tank trailers and self-12
propelled equipment. 13
Sec. 7. “North American Industry Classification System” or 14
“NAICS” means the 2022 North American Industry Classification 15
System, as published by the Bureau of the Census of the United 16
States Department of Commerce. 17
Sec. 8. “Rent,” “rental” or “renting” means entering into an 18
agreement with a heavy equipment rental company for the use of 19
heavy equipment rental property in exchange for consideration for 20
a period: 21
1. Not to exceed 365 days; or 22
2. That is open-ended under the terms of the rental contract 23
with no specified end date. 24
Sec. 9. 1. “Rental charge” means the total amount of 25
consideration, including, without limitation, cash, credit, property 26
and services, charged by a heavy equipment rental company for 27
the rental of heavy equipment rental property, valued in money, 28
whether received in money or otherwise, and without any 29
deduction for: 30
(a) The cost of the heavy equipment rental property to the 31
heavy equipment rental company; 32
(b) The cost of materials used, labor or service cost, interest 33
paid, losses, the cost of transportation to the heavy equipment 34
rental company, taxes imposed on the heavy equipment rental 35
company or any other expense of the heavy equipment rental 36
company; and 37
(c) Any charges by the heavy equipment rental company for 38
any services necessary to complete the rental, including, without 39
limitation, any delivery charges which are not stated separately 40
and any installation charges which are not stated separately. 41
2. The term does not include: 42
(a) Any fees or charges for the delivery or transportation of 43
heavy equipment rental property which are stated separately; 44
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(b) Any installation or other service charges which are stated 1
separately; 2
(c) Any discounts, including, without limitation, those in the 3
form of cash, term or coupons that are not reimbursed by a third 4
party, which are allowed by the heavy equipment rental company 5
and taken by the renter on a rental; 6
(d) Any interest, financing or carrying charges from credit 7
extended on the rental of heavy equipment rental property, if 8
stated separately; 9
(e) Any taxes legally imposed directly on the renter which are 10
stated separately; and 11
(f) Any other separately stated charges or fees, including, 12
without limitation, any separately stated fee for recovery of 13
property taxes imposed on heavy equipment rental property 14
pursuant to this chapter. 15
Sec. 10. “Renter” means a person who rents heavy 16
equipment rental property from a heavy equipment rental 17
company in this State. 18
Sec. 11. 1. Each person responsible for maintaining the 19
records of a heavy equipment rental company shall: 20
(a) Keep such records as may be necessary to determine the 21
compliance of the heavy equipment rental company with the 22
provisions of section 15 of this act; 23
(b) Preserve such records for 5 years or until any litigation or 24
prosecution related to compliance with section 15 of this act is 25
finally determined, whichever is longer; and 26
(c) Make such records available for inspection by the 27
Department upon demand at reasonable times during regular 28
business hours. 29
2. The Department may adopt regulations specifying the types 30
of records which must be kept to determine the compliance of a 31
heavy equipment rental company with the provisions of section 15 32
of this act. 33
Sec. 12. To verify the accuracy of any report filed pursuant 34
to section 15 of this act or, if no such report is filed, to determine 35
the compliance of a heavy equipment rental company with section 36
15 of this act, the Department, or any person authorized in writing 37
by the Department, may examine the books, papers and records of 38
any person who is required to comply with section 15 of this act. 39
Sec. 13. 1. Except as otherwise provided in section 14 of 40
this act, a heavy equipment rental company may impose a recovery 41
fee in an amount not to exceed 2 percent of the rental charge for 42
the rental of heavy equipment rental property to a renter. 43
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2. The amount of any recovery fee imposed pursuant to 1
subsection 1 must be separately stated on an invoice provided to a 2
renter of heavy equipment rental property. 3
3. A heavy equipment rental company that imposes a recovery 4
fee pursuant to subsection 1 shall: 5
(a) Hold the amount of all recovery fees collected in a separate 6
account; and 7
(b) Use the money in the separate account only to offset any 8
taxes imposed pursuant to this chapter on heavy equipment rental 9
property. 10
Sec. 14. A heavy equipment rental company shall not charge 11
a recovery fee pursuant to section 13 of this act for the rental of 12
any heavy equipment rental property to: 13
1. The United States, its unincorporated agencies and 14
instrumentalities; 15
2. Any incorporated agency or instrumentality of the United 16
States wholly owned by the United States or by a corporation 17
wholly owned by the United States; 18
3. The State of Nevada, its unincorporated agencies and 19
instrumentalities; 20
4. Any county, city, district or other political subdivision of 21
this State; and 22
5. Any other person or entity that this State is prohibited from 23
taxing under the United States Constitution, laws or treaties of the 24
United States or the Nevada Constitution. 25
Sec. 15. Not later than August 15 of each calendar year, a 26
heavy equipment rental company that imposes a recovery fee 27
pursuant to section 13 of this act shall file with the Department, 28
on a form prescribed by the Department, a report which separately 29
states the amount of: 30
1. The recovery fees collected by the heavy equipment rental 31
company during the immediately preceding fiscal year; and 32
2. The taxes imposed pursuant to this chapter on the heavy 33
equipment rental property of the heavy equipment rental company 34
for the immediately preceding fiscal year. 35
Sec. 16. 1. A person shall not: 36
(a) Make, cause to be made or permit to be made any false or 37
fraudulent report or false statement in any report with intent to 38
defraud in violation of the requirements of subsection 3 of section 39
13 of this act; 40
(b) Make, cause to be made or permit to be made any false 41
entry in books, records or accounts with intent to defraud in 42
violation of the requirements of subsection 3 of section 13 of this 43
act; or 44
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(c) Keep, cause to be kept or permit to be kept more than one 1
set of books, records or accounts with intent to defraud in 2
violation of the requirements of subsection 3 of section 13 of this 3
act. 4
2. Any person who violates the provisions of subsection 1 is 5
guilty of a gross misdemeanor. 6
Sec. 17. (Deleted by amendment.) 7
Sec. 18. (Deleted by amendment.) 8
Sec. 19. This act becomes effective on July 1, 2025. 9
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