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April 17, 2014

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the legislature:

Horsford maneuvering now, planning ahead

Senate majority leader trying to give tax changes a jump for 2011

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cathleen allison / nevada appeal file

Nevada Senate Majority Leader Steven Horsford has proposed the creation of a seven-member panel that would prepare tax bills for the 2011 Legislature.

Senate Majority Leader Steven Horsford said Monday that he has given up on broadening the state’s tax structure this session by gaining approval for a corporate income tax, but he wants to enter the 2011 session fully armed to enact real tax reform.

Horsford is proposing a commission be created to develop recommendations and proposed bills on a new business tax for the 2011 Legislature to consider.

The Nevada Stabilization and Advancement Commission would study a corporate income tax, a tax on business-to-business transactions, and the distribution of property tax revenue between the state and local governments, Horsford said.

The idea will be derided by some as yet another study of Nevada’s tax structure, which has undergone numerous examinations in recent decades. But Horsford said emphatically that the committee’s work would amount to more than a study.

“Many of those (studies) have to be theoretical,” he said. Instead, he wants the commission to come up with proposed tax rates and bill drafts, and changes to the Taxation Department’s software so revenue could be collected as soon as July 1, 2011, should the Legislature agree on a tax.

The commission would only make recommendations; any new taxes would still have to be passed by two-thirds of the Legislature.

Additionally, Horsford said the interim commission, which would be led by legislators, would look at long-term strategies to improve Nevada’s rankings in a host of policy areas, such as education and health care. The seven-member commission would be made up of two members from the leadership of each house, one from the minority leadership of each house, and one representative of the governor.

“We won’t be able to move forward without strategies,” Horsford said.

Horsford, as well as many other Democrats, entered the session hoping to make major changes to the state tax structure, which critics say is too reliant on taxes on sales and gaming. Now as the end of session nears, legislators complain that the taxes they are proposing are a “Band-Aid.”

Horsford said that frustration prompted him to propose creation of the commission.

“It has become apparent for valid, logistical reasons — it takes a year to 18 months to start collecting revenue on a new tax, as well as the burden to come up with a short-term solution to our budget crisis” — that broader reform couldn’t be done this year, he said.

He had hoped to pass legislation this session that would institute a corporate income tax in 2011. But his idea met resistance from Republicans.

It’s unclear how Horsford’s idea, to create the interim commission, will be received by the rest of the legislative leadership, which was struggling to reach agreements to solve this session’s problems before Horsford offered this proposal.

Horsford said Monday he wants his proposed commission to be part of the final deal agreed to by Republicans and Democrats.

As of late Monday night, Legislative leaders still had not reached an agreement on reforms to public employee benefits, pay and pensions. Senate Republicans have been withholding their votes on a tax package until they have an agreement on the reforms.

Horsford has previously said he supports a corporate income tax on net profits. He said the “business transaction tax” that the commission would study would be a version of a sales tax on services — right now it’s only on goods — except it would tax only professional services between businesses.

The third proposal Horsford mentioned, to look at local government tax revenue, has been a priority this session of Senate Minority Leader Bill Raggio, R-Reno.

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