State tax commission looking at license tax for trusts

Tuesday, Oct. 5, 2004 | 11:05 a.m.

CARSON CITY -- The state Tax Commission is going to review whether thousands of trusts and estates should be paying the $100 a year business license tax.

Commissioner David Turner of Reno said Monday that trusts are one of the largest vehicles used in estate planning. And he said families set up trusts for the education of their children.

"There are hundreds of thousands of these," said Turner, a certified public accountant, during a meeting of the commission Monday.

He said the state Department of Taxation has already sent letters to trusts advising them they may be subject to the tax.

Carole Vilardo, executive director of the Nevada Taxpayers Association, said the problem arises with individual trusts, not business trusts. After the meeting, Vilardo said this "was the law of unintended consequences" in trying to tax all individual trusts.

Dino DiCianno, deputy director of the taxation department, said, "Each day we find a new wrinkle." He said the department has "struggled" in trying to determine whether trusts and estates must pay the tax.

He said the department, based on records of the Secretary of State's Office and the IRS, thinks there may be 250,000 to 300,000 people or businesses that are subject to the business tax.

He recommended and the commission agreed to open workshops to define trusts and estates. There are many different kinds of trusts, he said.

In one ruling by the commission Monday, it held that the estate of Maurice Weikel should not be treated as a financial institution for payment of the modified business license tax.

Randal Kuckenmeister, representing the estate, said it had one employee, the granddaughter of the doctor. The department wanted to impose the 2 percent payroll tax on the estate on grounds it was a financial institution. But the commission overturned the recommendation. The 0.6 percent business payroll tax would be imposed.