NAC372.942. Termination of lease.

For the purposes of NAC 372.938:

     1. A retailer may discontinue charging sales tax on the basis of gross lease charges when a lease agreement is terminated. Periodic billing statements for amounts which are past due at the time the agreement is terminated may continue after termination for collection purposes.

     2. Evidence that a lease agreement has been terminated includes:

     (a) Documentation showing that the leased property has been repossessed or returned to the lessor.

     (b) A formal notice of termination that has been personally served upon the lessee or served upon the lessee by certified mail, return receipt requested, or registered mail.

     (c) Proof that the property has been wrecked, damaged, stolen or otherwise rendered unusable.

     (d) A new agreement to lease the same property to the same or another lessee.

     (e) Any other evidence or documentation which is acceptable to the Department and shows that a lease agreement has been terminated.

Ê Such evidence must be maintained pursuant to NRS 372.735.

     3. Any payments, penalties or other charges or fees collected by a retailer upon termination of a lease and return of the property as a result of a breach of contract or a mutually agreed-upon early termination of the contract, if separately stated on the applicable invoices, contracts or other documents, are not subject to taxation as gross lease charges. Any portion of those payments, penalties, fees or other charges which represents sales or use taxes must be reported and remitted to the Department.

     (Added to NAC by Tax Comm’n by R105-09, eff. 11-25-2009)