Senate panel approves hike in slot tax for small firms

Friday, April 25, 2003 | 9:18 a.m.

CARSON CITY -- A Senate committee voted Thursday to raise the taxes on small slot machine operators, notary licenses and sales of stocks, but the committee deadlocked over a new tax on entertainment.

The Senate Taxation Committee is slowly building a piece-by-piece tax plan to cover an estimated deficit in the coming two years of more than $700 million.

Committee Chairman Mike McGinness, R-Fallon, said May 8 is the deadline for completion of the plan.

The committee already approved phasing in a 35-cent tax increase for each pack of cigarettes. There would be a 20-cent raise the first year and an additional 15-cent increase in the 2005 fiscal year. That would bring the total tax to 70 cents per pack and would yield a projected $58 million a year.

Earlier this month, however, the committee rejected Gov. Kenny Guinn's plan for a 0.25 percent tax on gross receipts of business. The chairman said the committee would discuss next Thursday the proposed sales tax on services, favored by the Las Vegas Chamber of Commerce and other businesses.

Sen. Ann O'Connell, R-Las Vegas, introduced a new wrinkle to the tax debate Thursday. She suggested imposing a tax on tickets sold on the Las Vegas monorail that is now being built on the Strip.

She said that a tax could be imposed on the $2.50 ticket and added that she has heard projections there will be 19,000 riders a month.

But Sen. Joe Neal, D-Las Vegas said, "You're talking about something that doesn't exist."

The committee did not pursue the O'Connell suggestion but it could be raised later.

The committee decided to boost the taxes on those businesses that have 15 slot machines or less. Under the plan adopted, the quarterly fee per machine for those with up to five machines would go from $61 to $80. And those with six to 15 machines would see their fee rise to $143. Their current fee is $106.

O'Connell complained, "You are really hitting the small business person with this tax." She said the Clark County tax was already $250.

O'Connell and Sen. Sandra Tiffany, R-Henderson, voted against the slot tax, which was proposed by Gov. Kenny Guinn and Sens. Terry Care, D-Las Vegas and Mark Amodei, R-Carson City.

The increased restricted slot tax would raise an estimated $4.7 million over the next two years.

The committee voted unanimously for a 100 percent tax increase on the sales of stocks and a 50 percent raise in the fees on notary licenses. Those changes would bring in more than $15 million over the next two years, officials said.

But the committee could not agree on whether to impose an entertainment tax. Rhoads said that levy would "be getting the lower income. It would add a tax to people when they are having fun."

Both the Guinn and the Care-Amodei plan proposed a tax on entertainment admission charges.

Townsend said he could not support a tax on video rentals or movies because it would just be passed on to consumers.

There is also disagreement on what types of activities should be taxed and McGinness postponed settlement of that debate.

The full Senate on April 17 voted 17-4 in favor of Senate Bill 298 that raised certain fees in the secretary of state's office on filing articles of incorporation. That is estimated to bring in an estimated $27 million over the next two years.

The bill also included boosting the application fee for a business license from $25 to $50 and making the license renewable each year in October. This would also hit the sole proprietors. That coincides with the Care-Amodei package and would raise an estimated $8.5 million over the next biennium.