A wide-ranging bipartisan tax bill that does not include a gross receipts tax may be introduced into the Nevada legislature this week.
The Senate bill is in response to Gov.
Kenny Guinn's tax proposal that includes a much-opposed .25 percent tax on the state's businesses' gross receipts.
The governor's bill is based on a report written by his Task Force on Tax Policy.
The alternative bill is sponsored by Sen.
Mark Amodei (R-Capital) and Sen.
Terry Care (D-Clark).
Sen.
Amodei outlined the specifics of the bill at a breakfast meeting of the Northern Nevada Development Authority last week.
The Amodei-Care bill is as comprehensive as and, in some ways, mirrors the governor's plan.
Sen.
Amodei said he received a 174-page draft of the bill from the Legislative Counsel Bureau two weeks ago, but returned it to the LCB for revision.
A draft of the governor's bill, too, was 175 pages, and is currently being reviewed.
The Senate bill and the governor's bill, however, differ in one significant way: The cornerstone of the governor's bill is a gross receipts tax, while the foundation of the Senate's bill is a services tax.
Sen.
Amodei said a services tax would take a couple years to implement, but it would tap into a huge portion of the Nevada economy.
"We have $34 billion to $38 billion in services revenue in this state," said Amodei.
"We are trying to capture $10 billion to $15 billion of that with a 3 percent tax."
A large proportion of that would be professional services, he said.
A services tax was part of a broad plan put together last year by the Nevada Taxpayer's Association, an organization that represents the business community.
The plan was presented to the governor's tax policy task force, which rejected the services tax portion of it, saying such a tax is too regressive, meaning it taxes those least able to pay.
The Amodei-Care bill, like the governor's plan, would implement a new amusements tax.
The governor's plan is for a 7.3 percent tax on all non-participatory entertainment.
The senator's bill would institute a 3 percent tax on all entertainment, both spectator and participatory, with a $15 or more admission fee.
The governor's plan to not tax participatory activities such as golf club memberships was roundly criticized by the joint Senate and Assembly Committees on Taxation, which are debating the myriad tax bills.
The senators' bill would also create a new, high-end gaming tax bracket that would increase the gaming tax from 6.25 percent to 6.75 percent for the largest casinos.
"This is meant to catch the megaresorts," said Amodei.
Last week Sen.
Joseph Neal (D-Clark) introduced a bill that would raise the gaming tax for all casinos by 4 percentage points, to 10.25 percent.
The Amodei-Care bill, like the governor's plan, proposes raising liquor, cigarette and property taxes as well as the business license tax, also called the business activity tax or BAT.
The senators are proposing doubling the BAT, which means businesses would pay $200 per employee annually.
The governor's plan is to triple the head tax until the gross receipts takes effect, when the BAT would drop back to $140.
Sen.
Amodei said his bill would double the liquor tax and raise the tax on a pack of cigarettes by 75 cents over the next two years.
His bill adjusts the slot route operators' tax by 33 percent, to keep pace with inflation.
The senators' bill will include a 10-cent increase in the property tax over two years.
The senators are also recommending a payroll tax surcharge on all businesses other than gaming and mining, which already pay a similar tax, Amodei said.
The surcharge would probably take effect for employers with more than 100 to 150 employees.
"We're looking at capturing the largest employers like financial institutions," said Amodei.
The Amodei-Care bill would also place a $400 million floor on the state's Rainy Day Fund, which currently hovers in the $130 million range.
A $136 million fund is no insurance policy," said Amodei.
"I'd suggest we need a $400 million fund ...
to get through the dips in our economy."
The NNDA audience, which consisted of a wide range of businesses, applauded Amodei's rejection of the gross receipts tax.
"We had a lot of states to choose from and we chose Nevada," said Thomas Pasinger, plant manager at the new Starbucks Corp.
coffee roasting plant in Minden.
Pasinger said that taxes were among the top five reasons Starbucks chose Nevada.
"We like the economic diversification plan this state has and business taxes are in direct conflict with that."
Pasinger said he challenged the governor and the legislature to come up with proactive ways to bolster the economy.
"We spent $11.9 million building the plant, that's money spent with local businesses," Pasinger said.
"That's more than we'd pay in any tax.We've created 75 jobs to date and will add 25 more jobs in the next few weeks."
In response, Amodei warned the audience that while he remained opposed to a gross receipts tax something had to be done to deal with the state's budget deficit.
If the business community balked at every tax, said Amodei, the results could be worse in the end.
"If you have a concern about a CPI increase on the business activity tax, I'm scared what we'll get at the ballot box," said Amodei.
If it's left up to voters, warned Amodei, they'll come after the gaming industry and business.
"There are special interest groups in this state that will put forth the initiatives," he said.
Mary Henderson, a lobbyist for NNDA and others, said other tax proposals are being worked on in the legislature, including changes to the property tax structure being proposed separately by Sen.William Raggio (R-Washoe), majority floor leader, and Assemblyman Lynn Hettrick (RDouglas, Carson City and Washoe), minority floor leader.
In the end, Henderson believes a final tax bill will originate with the governor's still-developing bill, after many changes are made by legislators.
"I just hope," said Henderson, "that it doesn't come down to the 11th hour."
