Critics say tax plan not equitable

Friday, May 18, 2001 | 11:07 a.m.

CARSON CITY -- Sen. Mark James, R-Las Vegas, is trying to quiet critics who say his plan to raise $65 million in franchise fees would unfairly tax some small corporations in Nevada.

James held a series of closed-door meetings Thursday in an attempt to eliminate the bugs in his proposal to levy a $500 fee on all companies that file with the Secretary of State's office.

He has yet to introduce the tax bill, but he says it should be ready by today or early next week.

To soften the blow on Nevada companies, James proposed they be given an exemption on their business activities tax up to $500, depending on what they pay. A company pays $100 a year for each worker.

For corporations with five or more employees, the new filing fee would be a wash. Corporations with fewer than five employees would be paying more, however.

For instance, a corporation with two workers pays $200 a year for the business tax. Under James' initial proposal, the company would be exempt from the business tax. It would, however, end up paying the new $500 fee, thus getting hit with an extra $300 bill.

"We're trying to make an effort to address all of the concerns," James said. "We want to ensure the measure is as fair as possible.

"The impediment is considering the way in which this filing fee would be structured to make it as fair as possible. We want to keep Nevada as the No. 1 place for businesses to incorporate."

GOP senators met with Gov. Kenny Guinn behind closed doors Thursday to discuss the tax. One senator, who asked not to be named, said there were concerns about how the tax would affect small business.

A spokesman for Guinn said he had some concerns with the tax, but he attended the caucus to participate in the discussion and to listen to suggestions.

Senate Minority Leader Dina Titus, D-Las Vegas, criticized the measure. She said it would affect corporations in which the owner was the only employee. Many of these corporations are attorneys, consultants or accountants. And there are some small businesses run by a family.

James had originally scheduled a hearing for today on the first of his two-bill package. But he canceled that until the second bill is ready.

Even though the session is to end in slightly more than two weeks, James said, "There is no reason to engage in haste and introduce a bill that is going to require substantial amendment and reconstructing when we can take a few days here and work through it in a deliberate fashion."

Money from the fees would be ticketed for pay raises for school teachers.

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