Tax collections rise in December

Erin Neff

Friday, Feb. 28, 2003 | 11:28 a.m.

CARSON CITY -- The state's sales tax collections rose in December 2002 compared with the previous December in the largest percentage increase since July 1999.

Statewide taxable sales in December 2002 totaled $3.2 billion, an 8.4 percent increase compared with the same period in the previous year, officials said today.

Assemblywoman Chris Giunchigliani, D-Las Vegas, said the numbers "show the economy is rebounding."

But Giunchigliani, who is vice chair of the Assembly Ways and Means Committee, warned that the state still needs to find a way to broaden the tax base to make the state's revenue collections less susceptible to downturns in the economy.

"No matter what, it's time that we fix the structural problem," Giunchigliani said.

She also warned that some of her colleagues across the aisle will use the positive numbers to oppose tax increases.

"They'll use this as a reason not to do anything," Giunchigliani said. "That's not going to take us out of the hole."

Despite the growth, the state is now $17 million below the Economic Forum's projected revenue for the fiscal year that ends in June, according to data released this morning by the state Department of Taxation.

Gross revenue collections from total sales and use taxes totaled to $232.1 million for December 2002, up 7.9 percent compared with the previous year, and a 5.6 percent increase from December 2000.

Other statistics released this morning by the Taxation Department show Clark County sales were up 10.4 percent while four counties, Carson City, Lander, Pershing and Storey, showed decreases.

Tax revenue collected from eating and drinking places statewide rose 4.9 percent. In Clark County, that number rose 5.7 percent.

The largest increase statewide was in the sales of home furnishings, which were up 27.6 percent.

Other categories also faired well, with miscellaneous retail sales up 11.2 percent and wholesale trade-durable goods up 21.2 percent.

Gov. Kenny Guinn said that while the figures were positive, the state still fell an additional $2 million below the Economic Forum projections upon which the budget is built.

"This illustrates why it is so important for an immediate infusion of new revenue," Guinn said. "What December's results show is that even in a good month, we continue to lose ground."

Guinn said that in order to meet the state's budgetary needs for this current fiscal year ending June 30, Nevada will need to have 15 percent growth in sales tax revenue for the next four months.

Wednesday Guinn introduced a bill that would enact emergency tax increases on business, slot routes, cigarettes and liquor to make up the current shortfall.

If approved, the emergency taxes would take effect April 1 and sunset June 30. The tax increases are projected to bring the state $80 million to fill the shortfall. The projected deficit for the 2004-05 biennium is $704 million.