State to offer tax relief period

Jeffrey Libby

Tuesday, Dec. 4, 2001 | 9:36 a.m.

Not since the Persian Gulf War -- when tourism slumped and then-Gov. Bob Miller cut 10 percent from the state budget and instituted a hiring freeze -- have delinquent Nevada taxpayers fared so well.

The state Taxation Commission in February, as it did in 1993, plans to offer a tax amnesty program, allowing businesses with outstanding taxes to pay them, through June 30, without incurring late-fee penalties.

The state Tax Commission on Monday unanimously approved the five-month program.

"When you have a bad economy and everyone starts looking for revenue, you want to look to what already exists that you might not be getting," Carole Vilardo, president of the Nevada Taxpayers Association, said.

An eight-member task force appointed by Gov. Kenny Guinn is studying how to restructure state taxes to help make up for an expected $1 billion shortfall by 2009. In June legislators passed a $3.7 billion budget for the next two years.

Vilardo's group requested the tax amnesty program in August. At least four states established amnesty programs earlier this year, Vilardo said.

In 1993, two years after Miller severely curtailed government spending, a similar program raised $2.8 million from 1,800 businesses that decided to take advantage of the break on late fees.

Kami Dempsey, an administrator for the Las Vegas Chamber of Commerce, said her association is already "in the process of educating" its 6,800 members about what taxes they are required to pay.

"We have to give the businesses an opportunity to not be afraid to get registered with the state," she said.

In many cases, businesses don't pay "use" taxes, Vilardo said, because they have not familiarized themselves with the state's tax laws and don't realize they are liable.

Businesses that subscribe to out-of-state magazines and trade publications, for example, are required to pay a "use" tax for those subscriptions, Vilardo said.

A "use" tax is applied on most equipment and other supplies bought out-of-state and takes the place of the state sales tax, applied to items bought locally.

Dino Dicianno, a state tax commissioner, said that in 1955, when tax laws were passed in Nevada, the system was built around an economy based largely on manufacturing. Today, though the state is largely dependent on a service economy, those laws remain. But they have been amended many times, he said.

Those complex amendments, Vilardo said, in some cases may nurture distrust.

"All you have to do is look at the IRS," she said. "And whether the rating is good, bad or indifferent, then you look at the other agencies that also have the ability to enforce compliance, and many times you regard them the same way."

The amnesty program should help overcome that attitude, she said.

The commission on Monday passed another regulation into the tax law that would notify certain businesses they could be subject to private debt collection if taxes are not paid.