Culinary shops for criticism of Wal-Mart tax stand

Friday, Jan. 17, 2003 | 9:47 a.m.

Culinary Local 226 went on a shopping spree that it believes proves that retail giant Wal-Mart would not raise prices if forced to pay a possible new business tax in Nevada.

The company had issued a prior statement to the contrary.

The union bought the same items from Wal-Mart stores in Las Vegas and Panorama City, Calif., earlier this month to see whether the prices in California, which has an 8.84 percent corporate income tax, differed in Nevada, which does not have a corporate tax.

The union, which represents food servers, waitresses and other hotel workers, found that in most cases California prices were equal to or lower than the prices in Las Vegas.

Wal-Mart spokesmen at company headquarters in Bentonville, Ark., said factors other than taxes also determine prices and that Culinary's findings did not prove anything.

Culinary officials revealed their findings Thursday at the union headquarters in Las Vegas. They repeated their call for establishment of a broad-based business tax to help Nevada solve a projected $704 million shortfall in the state general fund budget over the next two years.

Gov. Kenny Guinn is expected to reveal his budget plan on Monday in his State of the State address before the Nevada Legislature in Carson City.

"We think the solution is simple," D. Taylor, Local 226 secretary-treasurer, said. "We think big multi-national corporations like Wal-Mart and Bank of America need to pay their fair share. They are paying nothing on the money they make in Nevada."

Culinary found that both stores charged $11.82 for a man's shirt made by George, $17.92 for Riders women's pants, $14.94 for Wrangler men's jeans, $5.67 for a package of Dove soap, $2.84 for Crayola markers, and $4.87 for Duracell batteries.

The California store charged less for Kleenex (94 cents versus $1.34 in Las Vegas) and a three-ring binder ($3.48 versus $3.77) and more for Tylenol ($3.97 versus $3.79). The total for the nine items, excluding sales tax, was $66.45 in California and $66.96 in Las Vegas.

Bob McAdam, vice president of state and local government relations, was quoted last fall as saying: "Any tax increase will have a ripple effect. We'd have to raise our prices."

Culinary reproduced that quote and displayed it on a placard at the press conference.

"We decided to see for ourselves," Taylor said in explaining the shopping spree.

Local 226 political director Glen Arnodo shopped the California store on Jan. 2 and Assemblywoman Peggy Pierce, D-Las Vegas, the union's community liaison, bought the same items at the 4505 W. Charleston Blvd. store on Jan. 6.

"They are saying that prices would go up but that's not true," Arnodo said. "As a matter of fact California ended up a few cents cheaper."

Wal-Mart spokesman Bill Wertz said, however, that "prices generally vary for many reasons." He said two Wal-Mart stores in the same city could have different prices depending on nearby competition.

Wertz said he did not know why the Panorama City store and and Las Vegas store charged the same price on many items, given the added corporate tax in California.

"It could well be that the tax is an additional cost, but because of competition could be absorbed in one area more than in another area," Wertz said. "A tax is still an upward pressure on price, but we try to be on the side of the customer."

Nevada is one of only four states that does not have a corporate tax. The gaming industry has been pushing a proposed new one-quarter of 1 percent gross receipts tax, arguing that all businesses must pay their fair share.

The Las Vegas Chamber of Commerce and several industries oppose a gross receipts tax, arguing that it would penalize businesses that operate on a small profit margin. Wal-Mart spokeswoman Cynthia Illick also said her company would oppose that tax.

"The gross receipts tax would be an added expense that Wal-Mart would incur," Illick said. "It would become one of the many factors we consider in setting everyday low prices for our customers."

The union has not yet supported any specific business tax but distributed a fact sheet arguing that the gaming industry provides half of the money in the Nevada's general fund. The general fund pays for items such as education, welfare programs and prisons.

The union, whose members have more than 30,000 children attending Clark County public schools, has argued that the increased taxes are needed to fund education.

"We don't think big companies like Wal-Mart pay their fair share of taxes or take care of our schools," Arnodo said.

Organized labor has long been at odds with Wal-Mart, which operates nonunion stores. The Nevada AFL-CIO has staged Wal-Mart boycotts, arguing that the company engages in unfair labor practices and imports products made in foreign "sweatshops." The company has vigorously denied the sweatshop allegations and has defended its nonunion position by arguing that there is no need for third-party representation.

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