Tax panel not clear on who pays

Erin Neff

Friday, Sept. 5, 2003 | 11:12 a.m.

Although the new business license fee took effect July 1, the state's Tax Commission is still no closer to defining who is supposed to pay the $100 a year levy.

Paperboys? Ice cream truck vendors? Landlords?

Tax commissioners charged with setting the regulations for the Legislature's tax law struggled with everything from who should pay to how to define earnings during Thursday's workshop.

"I have a feeling our projections for new taxpayers are lower than they will turn out to be," Commission Chairwoman Barbara Smith Campbell said at the end of the meeting linked by video to Carson City.

Deputy Attorney General Greg Zunino began the discussion that prompted Campbell's remarks when he tried to get the commission to define what constituted earnings.

Quickly he and others realized that the tax law does not specify gross or net in the definition of earnings for the business license fee.

"That is really a policy issue, and there's no guidance here," Zunino said.

Commissioners decided the Legislature must have meant gross because net treads heavily into the potential for the tax to be considered an income tax.

Commissioner David Turner, speaking from Carson City, then asked: "Do we have to communicate to paperboys that they're subject to the $100 tax?"

Campbell, in Las Vegas, asked him to clarify: "They are, or they aren't?"

"If he's not an employee, he must be a sole proprietor," Turner said.

Campbell agreed.

Turner advised that his "paperboy" actually has 2,000 clients and makes a living with his deliveries to rural areas outside of Reno. Turner said he believed the paper carriers had to be included.

"We need to deal with the statute as we have it, not as we would like it to read," he said.

Dino DiCianno, deputy executive director of the Nevada Taxation Department, told commissioners he could not answer a specific question about how the definition of earnings could affect the definition of what is considered a business subject to filing the business license fee.

"I'm at a loss right now," he said.

Nevada Taxpayer Association President Carole Vilardo shook her head in disbelief from the audience and declared the tax regulation attempts "a mess."

"I agree that our projections for new taxpayers are too low," Vilardo said after the meeting.

Gov. Kenny Guinn's spokesman Greg Bortolin reiterated Thursday that the governor is "hopeful" the commission can set the regulations and said no matter how the commission struggles, he does not believe Guinn will order a special session for lawmakers to define the intent of their law.

"We just spent a lot of money on two special sessions and I don't think the public will stand for a third one," Bortolin said.

Zunino also suggested Thursday that maybe the commission is "overthinking" the regulations.

But Campbell said the commission wants to be very clear in defining the regulations so that taxpayers have a clear direction about what their responsibility is.

The next workshop will be held Sept. 12 and the commission will reconsider the business license tax definitions at its Sept. 19 workshop.

"I think the glitches and the problems that we're facing now are clearly the result of the Legislature not holding a fair hearing," Bortolin added. "Everything was rushed and cobbled together at the last minute and this is what we're stuck with."

Senate Majority Leader Bill Raggio, R-Reno, said he disagreed that lawmakers hurried.

"It would be hard to say it's rushed since we took the longest legislative session in history to review taxes," Raggio said. "I don't think it's unusual for any of these issues to arise because people will always have some issue and something that needs clarification."

Raggio also said the legislative Tax Policy Committee established as part of the tax bill will be able to help with some of the policy issues until the next legislative session begins Feb. 7, 2005.