Senate Bill 41: What Your Cannabis Business Needs to Know
Nevada cannabis tax permit requirements changed during Nevada’s 2024-2025 biannual legislative session, legislators passed Senate Bill 41 (SB41)– Committee on Revenue and Economic Development. SB41 relates to the Department of Taxation, clarifying their permits relations to cannabis operations.
Cannabis Tax Permit Requirements for Nevada Cannabis Establishments
In addition to any other permits required by law, before the issuance of a cannabis establishment license by the Cannabis Compliance Board, every individual who wants to engage in the business must register with or obtain a sales/use tax permit and obtain a cannabis tax permit from the Department of Taxation. If a person is currently engaging in or conducting business as a cannabis establishment, the company should submit an application to the Department of Taxation for a cannabis tax permit by September 1, 2026. No later than December 31, 2026, the Department shall issue a cannabis tax permits for the submitted applications if the company is in good standing with Taxation. If the company is not in good standing with Taxation and the cannabis tax permit is not issued by December 31, 2026, then the Cannabis Compliance Board shall suspend the operations/license of the company until the cannabis tax permit is obtained.
What Happens If a Cannabis Business Is Not in Compliance?
In the event that a company is found in noncompliance after initial issuance of a cannabis tax permit, the Department will send the holder of the permit information that explains their noncompliance.
Opportunity to Cure the Violation
In no later than 30 days, after the information is sent to the license holder, if the holder pays the amount in full of any delinquent excise tax and penalties and interest relating to the violation, the Department will not hold a hearing. Additionally, if the holder has an approved written agreement to pay the violation, approved by the Nevada Tax Commission, then the Department will also not hold a hearing.
Hearings, Appeals, and Permit Revocation
However, if the alleged noncompliance is not paid by the permit holder, the Department must send the holder of the permit notice of a hearing.
No later than 30 days after the hearing has been conducted, the Department will serve the permit holder any decision regarding suspension or revocation of a cannabis tax permit. If the holder does not file an appeal with the Nevada Tax Commission, then the decision is final and not subject to judicial review. It is important to note that the Department will not issue a new cannabis tax permit to any person who has previously had a permit revoked, unless the Department is satisfied that the person will comply with the provisions.
Impact on Cannabis Establishment Licenses
Additionally, if the Cannabis Compliance Board receives a copy of the final decision issued by the hearing, that provides for the revocation or suspension of a cannabis tax permit or a sales and use tax permit, the Cannabis Compliance Board shall deem the applicable cannabis establishment license issued to the person to be suspended on the day on which the final decision is served. The Cannabis Compliance Board will only reinstate a license that has been suspended if the Board receives a letter from the Department of Taxation that the person has paid in full or the license was transferred and the liability has been paid in full form with the proceeds from the transfer.
Why SB41 Compliance Matters
Understanding the requirements for a cannabis tax permit created under SB41 is critical for Nevada cannabis operators as failure to comply can result in suspension of operations.
Contact Connor & Connor PLLC
Ensuring a cannabis establishment is compliant is not easy. If you are operating a cannabis business in Nevada, contact Connor & Connor PLLC for a consultation today, regarding your business’s compliance.
