Regulations sought by the secretary of state to limit business license fee exemptions for some home-based businesses were approved Thursday by a Nevada legislative panel.
In a party-line, 4-2 vote, the Legislative Subcommittee to Review Regulations approved the measure that Secretary of State Ross Miller said was needed to fix an error discovered after his office took over collecting the $200 state business fee in 2009 from the Department of Taxation.
Critics argued that with Nevada still struggling to emerge from the recession, now wasn't the time to impose a new tax on small businesses, and that it would harm people who sell things like Mary Kay cosmetics or Tupperware from their homes to try to make ends meet.
"Where does the secretary of state have the authority to expand this fee to a new set of people, a new set of businesses?" asked Sen. Michael Roberson, R-Las Vegas.
Legislative Counsel Brenda Erdoes said the authorization was in a bill passed by the 2009 Legislature that transferred responsibility for collecting the business license fee to the secretary of state.
Miller said people who host home parties to sell cookware or other items and make less than $27,000 a year would still be exempt. The intent of the regulation was to close a loophole that has allowed limited liability and other corporations to avoid paying the tax, he said.
Miller estimated 60,000 entities claim to be home-based businesses, and that the state is losing about $10 million annually.
The regulation limits the exemption to "natural persons" who sign a statement that they earn less than the threshold income.
A bill that would have implemented the changes Miller sought was approved by both the Nevada Senate and Assembly during the 2011 Legislature, but died in the final hours of the session when the measure didn't make it out of the statehouse to the governor's desk.
The same legislative subcommittee that approved the regulation Thursday deferred action in December, and no vote was taken when the full Legislative Commission considered it in February.
