Tax task force hopes to spread out new levies

Thursday, Aug. 22, 2002 | 9:31 a.m.

CARSON CITY -- Imposing a gross receipts tax on business, including Nevada's casinos, gained favor from a governor's tax task force Wednesday as it looked for ways to avert a state government deficit of $4.6 billion by 2011.

The task force also decided to look at increasing the property tax, raising cigarette and liquor levies, imposing an amusement tax and other revenues.There were no final decisions,and task force members said they wanted to impose a little bit in several areas rather than focusing on one tax.

Mike Sloan, a committee member and vice president of Mandalay Resort Group, told the panel he Nevada Resort Association would support a gross receipts tax if it were spread across the board to all businessesn Nevada.

The casino industry now pays 6 1/4 percent gross tax on its gaming winnings.

Task force member Brian Greenspun, president and editor of the Sun, said the acceptance of an added gross receipts tax on its gaming revenue was the right position.

There had been talk that a gross receipts tax would be imposed only on a hotel's nongaming activities, such as food, drinks and rooms and not on the gaming win.

Task Force Chairman Guy Hobbs said there are still many details to work out, such as the rate of the tax. He said businesses that do less than $150,000 or $200,000 could be exempted, but they would still have to pay the business activity tax of $100 a year per employee.

Hobbs said the biggest objection to the gross receipts tax will come from businesses with low margins of profit.

Committee members discussed a tax of one-half of one percent on gross receipts. Hobbs said that figure is still to be determined.

The group is expected to develop various combinations of taxes before settling on a decision before its final meeting Nov. 15.

Earlier in the meeting representatives of the Latin and the Asian Chambers of Commerce argued against any business tax, saying it would hurt the small operator.

The task force is looking at raising the property tax limit of $3.64 on $100 of assessed valuation to $4.04, with the state getting 12 to 13 cents of the increase and the rest going to local governments.

If the property tax was raised 10 cents statewide, it would mean an additional $57 million in revenue for the state. An additional $63 a year would be added in taxes on a home of $180,000.

"We're going to hear about it," from homeowners, Sloan said. "(But) our goal is to take a little bit from a lot of places."

Another recommendation that will be examined is raising the cigarette tax by 25 to 50 cents a pack. Raising the tax by 25 cents would bring in an additional $42 million.

Boosting the tax on liquor also is being considered. That could bring in an additional $18 million a year.

Kevin Quint, executive director of Join Together of Northern Nevada, proposed a 10-cent per gallon increase on beer and some liquor.

Quint estimated this would raise $7.1 million a year, of which $1.7 million could be put into alcohol and drug treatment and prevention programs. The rest, $5.4 million, could go to the state budget, he said.

The committee also agreed to look at imposing a sales tax on admissions to amusement and other events.

In giving preliminary support to a gross business tax, the task force rejected the suggestion of state Sen. Joe Neal, D-Las Vegas, who proposed raising the gaming tax to bring in as much as $380 million more a year.

Neal, a candidate for governor and a longtime critic of the gaming industry, told the task force the casinos attract 49 million visitors a year who are temporary residents who need government services, but the casinos don't pay enough in taxes to support these services. Residents end up picking up the rest of the tab, he said.

Committee member Ken Lange, executive director of the state's teachers' union, said 34 percent of the state's revenue comes from gaming, which employs only 20 percent of the work force. He said other major industries are not paying their fare share of taxes.

Neal's proposal also drew opposition from Danny Thompson, executive director of the Nevada State AFL-CIO.

"To say (the gaming industry) is not stepping up to the plate is not true," Thompson said.

Gaming produces good paying jobs with health insurance, he said.

The task force decided the state would need an additional $4.6 billion over the next 10 years just to fund the present programs, without any enhancements. Jeremy Aguero, chairman of the technical working group for the task force, said revenues are estimated to increase at a rate of 3.8 percent, while spending will grow at more than 5 percent just to finance the present programs.