Tuesday, March 2, 2004 | 11:01 a.m.
CARSON CITY -- Nevada's new business tax is right on target.
Chuck Chinnock, director of the state Department of Taxation, reported Monday that the first three months of collections yielded $51.9 million.
The 2003 Legislature imposed a 0.7 percent tax on the gross payroll of businesses. Chinnock said that is expected to yield $204 million a year. So the first collections for the quarter of October through December are measuring up to the estimate.
Senate Majority Leader Bill Raggio, R-Reno, said the news "is encouraging" that the receipts are living up to projections.
Chinnock told the Nevada Tax Commission he sent out 45,000 returns to businesses and received 38,000 payments. He said some of the returns may have been sent to the wrong address or to businesses that have closed.
Those unanswered returns will be examined further, he said.
Chinnock said the last quarter of the year's revenue could be inflated because that is the time businesses hand out bonuses to their employees. But he also said that is a time when some businesses reduce their workforces.
Businesses are allowed to reduce the health insurance benefits from the gross payroll.
The tax rate will be reduced to 0.65 percent in July. The modified business tax replaced the former $100 a year per employee tax that businesses paid.
Raggio said he's been impressed so far with the effort the department of taxation has "put forward" in administering the major changes in the tax system ordered by the Legislature. He also praised the tax commission for its "hard decisions" in adopting regulations to guide the taxpayers in complying with the law.
The major taxes imposed by the state are generally performing slightly above projections as the economy continues to improve.
The state Gaming Control Board reported last month it has collected $348.9 million from percentage fees, or 3.1 percent above predictions for the first seven months of the fiscal year.
Receipts from the state's sales tax have totaled $340 million for the fiscal year so far, an increase of 10.3 percent. The Legislature predicted the sales tax would rise by 5.9 percent.
The state's insurance premium tax, one of the major revenue generators, has produced $97.8 million so far this fiscal year, up 14.2 percent.
Collections from the liquor tax are up 74.7 percent this fiscal year, compared to a predicted 91.6 percent. Receipts from the cigarette tax have risen 116 percent but they are predicted to go up 157.3 percent this fiscal year that ends June 30th.
One tax that is failing to keep up with the prior year is the estate tax, apparently due to the tax being phased out by the federal government. The state has collected $15.2 million from the estate tax, compared to $21.3 million in the same period of 2002.
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