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Lawmakers talk revenue: Business tax plan gets hearing

Thursday, May 14, 2009 | 4:49 p.m.

Archive of Sun politics stories

The first major piece of an expected tax plan received a hearing on Thursday, just days before a self-imposed deadline to pass a tax package.

The proposed amendment would increase the state's tax on payrolls for wages employers paid above $250,000, though the amount is still in flux.

It would drop the modified business tax all businesses paid on their first $250,000 of salaries.

As the Sun reported this morning, about three-quarters of businesses in Nevada have payrolls under $250,000 a year.

The meeting started with this: "I'm sure you're all thrilled to know the time has arrived," said Assemblywoman Kathy McClain, D-Las Vegas. "It's time to talk about revenue."

Then, a series of lobbyists representing businesses -- construction companies, gaming, homebuilders -- testified that they were at the table. They recognized that the modified business tax would have to be raised, but they wouldn't commit to a number.

Las Vegas Chamber of Commerce Chairman Steve Hill also said the business community understood revenues would have to be raised. But he pointed again to the list of reforms to government pay and benefits that his members wanted to see.

The modified business tax rate is currently 0.63 percent. It would drop to 0.5 percent for the first $250,000 per year that all companies paid. (Buckley had said last night it would be two-tiered for businesses, but the latest amendment showed that all businesses would pay the lower rate.) It is yet to be determined how much it would increase for following years.

A spreadsheet prepared by staff showed that increasing it to 1 percent would raise an additional $202 million for the next biennium; 1.25 percent would raise $349 million; and 2 percent would raise $788 million. It could be implemented by Oct. 1, according to the Department of Taxation.

Discussion: 2 comments so far…

By neiman1

5/14/09 at 5:47 p.m.

Suggest removal

What does the size of the payroll have to do with what the tax rate should be. Why should a larger employer pay a higher rate than a small one? They already pay more money from having the same rate on more payroll. This entire concept that someone can pay more because they have more is so wrong.
By term25600

5/14/09 at 8:29 p.m.

Suggest removal

I think we should all see through these proposals to the real issue. The government wants to be made whole right now, and then increase its funding as the economy improves. New taxes NEVER go away, and they never go down !!!

The purpose of taxing business instead of individuals is to HIDE THE TAXATION. Everyone knows that business just adds the tax to the cost of doing business and raises prices to overcome it. So individuals pay it anyway, but they force business to collect it quietly and silently so there isnt political fallout.

I say NO NEW TAXES, PERIOD. Government, live within your means like the rest of us have to.

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