Officials say sales tax holiday could hurt state

Monday, Nov. 5, 2001 | 10:46 a.m.

A sales tax holiday proposed by two U.S. senators to encourage a shopping spree and stimulate the economy may not be practical for Nevada, an aide for Gov. Kenny Guinn said today.

"It would require a special session of the Nevada Legislature (to suspend the sales tax), and that will cost money," said Guinn spokesman Greg Bortolin, noting that the governor's staff discussed the issue Friday.

"The staff has reservations about it," Bortolin said.

While Senate Republicans are pushing an $89 billion economic stimulus package supported by President Bush, Sens. Olympia Snowe, R-Maine, and Patty Murray, D-Wash., are proposing a nationwide 10-day sales tax holiday in the 45 states and the District of Columbia that have sales taxes.

The plan calls for the states to suspend sales taxes and be reimbursed by the federal government for up to $6.5 billion in revenues.

Bortolin said that while the governor could call a special session of the Legislature at a moment's notice to consider suspending the state sales tax, Guinn would need more information about the plan before making such a move.

"The state sales tax and gaming accounts for 73 percent of the general fund, so it (a tax holiday) could hurt the state budget," Bortolin said. "I know of no other state that relies as heavily on the state sales tax as we do."

Bortolin, noting that unlike many other states Nevada has no state income tax, said state lobbyists in Washington, D.C., have indicated that a sales tax holiday "has a long way to go" to even get heard by Congress.

Another plan is in the works to help thousands of workers laid off since the Sept. 11 attacks in New York and Washington.

Guinn has not set a date unveil the plan, Bortolin said. The relief would come from a reserve fund, but the governor has not yet briefed staff on how the plan would be implemented, Bortolin said.

Part of the relief would help those about to be evicted from their homes.