Tax plan to get first hearing

Erin Neff

Tuesday, April 8, 2003 | 11:03 a.m.

CARSON CITY -- Senate Bill 382, a proposed alternative to the gross receipts tax, will get its first public hearing late this afternoon, and major opposition was lined up to provide testimony against the bill.

The linchpin of SB382, sponsored by Sens. Mark Amodei, R-Carson City, and Terry Care, D-Las Vegas, is a 4.5 percent sales tax on services over $50. That tax is used by Care and Amodei as an alternative to the gross receipts tax proposed by Gov. Kenny Guinn and the Nevada Task Force on Tax Policy in their respective bills.

The state's two biggest industries -- gaming and mining -- have been working to build consensus for the gross receipts tax, even though both industries would pay more if that tax were approved. They have their lobbyists poised to present their arguments against the Care-Amodei plan.

The debate is part of a Senate Taxation Committee hearing scheduled to begin at 1:30 p.m. SB382 probably will be heard between 4 and 6 p.m. and will be telecast to the Grant Sawyer Building, Room 4412, in Las Vegas.

"In opposing the sales tax on services, we are saying it is a tax that ultimately falls on the shoulders of the citizens of Nevada," Russ Fields, executive director of the Nevada Mining Association, said.

Greg Ferraro, a lobbyist representing the Nevada Resort Association, said the focus of today's opposition is to examine who will ultimately pay a sales tax on services and how that tax will be administered.

"The sales tax on services is more difficult to administer than the gross receipts tax," Ferraro said.

The gaming industry has agreed to pay a 0.25 percent increase in the gross gaming tax and a quarter of 1 percent tax on its gross receipts over $450,000 in non-gaming areas.

Fields said the mining industry would pay $6 million to $8 million in gross receipts taxes, in addition to the $20 million to $25 million it pays on the net proceeds of mines tax.

"Mining has no ability to pass these things through," Fields said. "The price of gold is the price of gold is the price of gold."

Still Fields, a member of the Nevada Task Force on Tax Policy, said he prefers the gross receipts over the sales tax on services. He said he will argue that a gross receipts tax is the only broad-based business tax that can help change Nevada's tax structure for the better.

"The fact that mining has always been a part of the state and been a part of the tax solutions is important," Fields said of his testimony.

Others expected to testify today in opposition are tax task force chairman Guy Hobbs, the state Taxation Department, the AFL-CIO, family law attorneys, architects, engineers and accountants.

"It's terrific," said a beaming Care, despite the opposition to his bill. "I'm a big believer in public discussion."