Las Vegas Sun

October 30, 2014

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New plan would delete gross receipts tax

CARSON CITY -- A tax plan alternative introduced Monday by two state senators would require Gov. Kenny Guinn to cut $50 million from his proposed budget by April 1.

Senate Bill 382 was developed by Sens. Terry Care, D-Las Vegas, and Mark Amodei, R-Carson City. It would raise a variety of existing taxes on gaming, property and services, but does not include the controversial centerpiece of Guinn's tax plan: a gross receipts business tax. The Las Vegas and Reno Chambers of Commerce strongly oppose that portion of the Guinn plan.

The Care-Amodei plan's major opponent is expected to be the gaming industry. Industry officials said the bill's proposed increases in the gaming and hotel room taxes are unacceptable.

"This bill does not spread the burden," said Greg Ferraro, lobbyist for the Nevada Resort Association.

SB382 would raise the gross gaming tax on casinos grossing $250,000 or more a month from 6.25 percent to 6.75 percent. Care said that is aimed at "catching the high-end operators." Guinn proposed raising it to 6.50 percent. The Senate Taxation Committee was to hear more testimony today on Guinn's tax plan.

Under the senators' bill, the state tax on hotel-motel rooms would be raised by 1 percent. Ferraro said that would do nothing to broaden the tax base. Kara Kelley, president of the Las Vegas Chamber of Commerce, said her group has "open eyes" to any tax proposal. The chamber has advocated a tax on services. The Care-Amodei appears to fit her bill.

An amusement tax of 3 percent would be imposed under the bill. But it would exempt the first $10 paid for an admission. Care said that would exempt movie tickets. The tax would be imposed on other activities such as golf.

Guinn proposed a 7.2 percent admissions tax and would exempt participatory activities such as golf and bowling. The two senators suggest a 3 percent service tax but exempt health care, child care, utilities and the construction of new homes. There would be a 3 percent tax on personal services but the first $50 paid would be exempt from the tax, meaning haircuts and similar services would escape the tax.

Care said the wording of this section on what services the tax will be imposed will entail a lot of "lively discussion."

Care said the tax includes a 5-cent annual increase on each $100 of property but that it would not go into effect if the governor holds down spending.

The package also calls for boosting the cigarette tax by 25 cents the first year and another 15 cents the second year, compared with Guinn's proposal to boost it by 70 cents a pack immediately.

The Care-Amodei plan also calls for a 100 percent increase on liquor, as opposed to the 89 percent suggested by the governor.

The bill also calls for the state to retain a balance of 15 percent of its yearly spending, up from the present 5 percent reserve.

It would raise existing taxes without creating a "Nevada IRS," Care said, referring to the governor's bill that would allocate $30 million to the Nevada Tax Commission for collection purposes.

A surcharge would be imposed on the unemployment tax paid by businesses on each employee. With those fewer than 300 workers, the tax hike would be 35 percent. Companies with more than 300 workers would be subject to a 50 percent increase.

Employers now pay an average of 1.34 percent tax on the first $19,400 paid a worker.

Gaming, mining, agriculture and utilities would be exempt from the tax.

The business activity tax, under SB382, would go from $100 a year per employee to $150 the first year of the biennium and then to $200 the second year. Guinn wants to boost it to $300 and then reduce it when the gross receipts tax is enacted.

Fees charged by the secretary of state would rise 50 percent, but those that were taxed at the last session would be exempt. The bill mirrors the Guinn proposal in its 33 percent tax increase for restricted slot operators by 33 percent.

Also introduced in the Senate Monday was a bill to raise the tax on property transfers and sales. Senate Bill 385, sponsored by the Senate Human Resources and Facilities Committee, calls for increasing the property transfer tax from $1.25 for each $500 of value in Clark County to $2.25.

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