State officials put final touches on payroll tax

Monday, Nov. 17, 2003 | 10:48 a.m.

CARSON CITY -- State taxation officials have put the final touches on the proposed regulations for the new payroll tax for business and financial institutions that is expected to yield an estimated $155 million this fiscal year.

Dino DiCianno, deputy director of the state Taxation Department, said a "significant amount" of the suggestions from the public have been incorporated in the final document that will be presented to the Nevada Tax Commission on Nov. 25 for adoption.

The taxes became effective Oct. 1 and the first payment is due in January.

Deputy Attorney General Greg Zunino said Friday that a business with employees must pay the tax even if it is not registered with the state Employment Security Division for payment of the unemployment premiums.

Zunino said businesses not signed up with Employment Security are obligated to register with the taxation department and start paying the payroll tax that is 0.7 percent for general business and 2 percent for financial institutions including banks.

Exempted from the tax are Indian tribes, nonprofit organizations and some political groups.

Meanwhile Attorney General Brian Sandoval says he hopes to release a legal opinion this week as to whether the 10 percent live entertainment tax applies to nightclubs where DJs merely spin records.

There is disagreement among taxation officials and the state Gaming Control Board on this issue. Nightclubs in casinos have become increasingly popular and produce a good share of the present 10 percent casino entertainment tax.

Come January the casino entertainment tax disappears and the live entertainment tax goes into effect. Dennis Neilander, chairman of the Nevada Gaming Control Board, said the revenue from those nightclubs was computed in the final revenue figures for the new tax.

"We want to make sure we are fulfilling our obligation of collecting the revenue that was intended to be collected," Neilander said.

But DiCianno said tax officials don't consider "live entertainment" to include a place where a person plays a record and people dance.

The new live entertainment tax doesn't go into effect until January and the final regulations are still being worked on.