Businesses that do business with the state of Nevada are facing a legal battle to avoid paying millions of dollars in state and local taxes.
The state has set aside $3.7 million in the state’s general fund for cleaning services for private businesses, and the tax is being used to cover cleaning expenses for non-profit organizations, according to documents obtained by NBC News.
The tax payment is part of the state budget that is set to be finalized on Monday, but a state audit released this week found some of the bills were overpayments, with some going back as far as three years.
The audit, which was conducted by the Nevada Commission on Corporations, found that the Nevada Department of Taxation and Finance overpaid for cleaning expenses on private businesses that had their tax bills collected by the state.
The agency overpaid more than $3 million for cleaning and maintenance expenses for a total of more than 1,000 non-profits, according the audit.
The audit did not provide details of what the non-commercial entities had been billed for, but said it “may include any services provided to those entities.”
The audit said it also found that some of those non-federal entities had not been required to submit a tax return for two years.
It’s not clear how many non-government entities had paid their tax bill by the time the audit was released.
The auditors said some non-governmental entities that did not have their taxes paid were being charged “exorbitant” amounts for services such as cleaning, pest control and pest control systems.
The state has said that they were reimbursed by a non-resident employer who was not a state employee.
“The audit is not a complete assessment of the tax and taxpayer costs incurred by the noncommercial entities that had unpaid taxes, but it does provide a snapshot into how many of these entities were not paying their taxes by the date of audit,” said state Attorney General Adam Yee in a statement.
Yee said the audit also found some businesses were paying less than what was required.
The Nevada Tax Commission is expected to release its final report by the end of the week.