Las Vegas Sun

February 10, 2012

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Sun editorial:

What is fair is fair

Nevada should look to tax out-of-state conglomerates rather than renewable startups

Wednesday, March 25, 2009 | 2:08 a.m.

State lawmakers are considering a bill to tax renewable energy produced in Nevada. The bill is designed to address the concern that the power would be exported to other states and Nevada would get little to nothing in return.

That sounds like a noble thought, but it is at best misplaced. Instead of trying to tax startup renewable energy operations, lawmakers should consider taxing the companies here that ship their profits to their headquarters in another state. Those companies pay little in taxes, enabling them to reap enormous profits here.

The nonpartisan Tax Foundation ranked Nevada’s business taxes as the third-lowest in the country. The state is one of five that don’t charge a business income tax. Nevada’s modified business tax is small, and property taxes are relatively moderate. The state also provides a slate of tax breaks and other incentives to companies.

Despite all of the state’s generosity, out-of-state companies don’t seem too willing to return the benefit. Consumers don’t necessarily pay any less at Vons or Macy’s or Wal-Mart in Nevada than they would in neighboring Arizona, California or Utah. Consumers should expect some benefit — California was third-highest in the Tax Foundation’s rankings of state business taxes. Arizona was 29th-highest and Utah was 40th.

Gov. Jim Gibbons and other tax fear mongers say that if the Legislature raises business taxes, companies would flee the state.

Really? Where would they go? California?

Lawmakers should ignore the governor’s Chicken Little routine and face the facts: With the out-of-state conglomerates paying little in taxes, Nevadans are left to shoulder the tax burden to pay for police, firefighters and roads. Lawmakers should start making the necessary changes in the state’s tax laws to put Nevada on a stable financial foundation.

Instead of picking on the nascent renewable energy industry, Nevada should assess a fair business tax on the out-of-state companies that operate here.

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