Tax plan looking good to Guinn

Friday, Oct. 18, 2002 | 11:12 a.m.

CARSON CITY -- Gov. Kenny Guinn said today he is looking "favorably" on the proposed recommendations of his tax task force, including imposing a gross receipts tax on business.

Guinn said, however, that he will not endorse any of the task force's findings 100 percent until he gets more details, including how many businesses will be exempt from the proposed one-quarter of one percent tax on the gross receipts.

He said he wants to see the impact such a tax would have on "mom and pop" businesses.

The Governor's Task Force on Tax Policy was created in the last legislative session to design a plan to solve Nevada's deficit. The task force has tentatively recommended a tax to cover all businesses, including gaming. Businesses that collect less than $350,000 would be exempt.

A business that receives $1 million in gross receipts would exclude the first $350,000 of that total and then pay on the remainder, under the plan by the tax task force.

The task force meets Wednesday. It will present its final recommendations to Guinn in mid-November.

The casino industry has endorsed a broad-based business tax, as long it is across the board. But many businesses are opposed, saying it would cripple their business.

Tom Cargill, an economist at the University of Nevada, Reno, said a gross business tax would not be healthy for economic development. He said it would hurt efforts to draw nongaming companies to Nevada.

Cargill also called the proposed tax unfair. For instance, a consultant may make $500,000 and keep $400,000 in profits while another company may take in the same amount and only earn 1 percent to 2 percent profit, he said. Yet these two companies would be taxed the same. Guinn said he's ambivalent about the recommendation of the task force to boost the property tax by 10 cents. The state is now limited to 15 cents on the property tax to pay off bonds to construct buildings for universities, prisons and other programs.

"We can't make it on 15 cents," Guinn said. In the past, Guinn has talked about re-allocating some of the existing property taxes that go to other governments.

A 10-cent increase on each $100 of assessed valuation in property would allow the state to collect another $61.8 million a year. An owner of a $150,000 home would pay about $52 more a year. The committee is also considering another 10-cent hike in the next few years.

The governor remains firm on backing an increase in the state's cigarette and liquor taxes.

The task force's proposal calls for doubling the present 35 cents a pack tax on cigarettes, which would raise $61.2 million a year. It also calls for doubling the nine cents a gallon tax on beer, the 40 cents a gallon tax on wine and the $2.05 on liquor to bring in an additional $16.4 million annually.

In the meantime, Guinn said he has started working on a budget to present to the 2003 Legislature. He said his staff and budget officials will be working "day and night" after the election to shape the budget because of the expected prediction of slim future revenues.