Democrats introduce bills to tax services and business revenue

By Anjeanette Damon

Wednesday, May 11, 2011 | 1:20 p.m.

Democrats today unveiled the details of their tax plan, introducing legislation proposing a sales tax on services and amending an existing bill to create a margin tax on businesses’ adjusted gross revenue.

The Assembly introduced Assembly Bill 569, which would impose a 1 percent tax on services such as car repairs, haircuts, accounting and dry cleaning. The bill would exempt services such as health care, funeral services, gas, Internet, phone and garbage collection.

The Senate Revenue Committee also introduced an amendment to Senate Bill 491 that proposes the creation of the business margin tax.

The 0.8 percent margin tax would be imposed on a business’s gross revenue. The first $1 million in revenue would be exempt and a variety of deductions would be allowed.

The two bills combined are expected to generate about $625 million in new revenue for the state.

Democrats argue a tax increase is needed to properly fund education and other essential services. Gov. Brian Sandoval has vowed to veto any tax increase and Republicans in the Legislature have so far supported his budget.

Public hearings on the bills will begin on Thursday.

In the face of criticism that Democrats introduced major tax legislation too late in the session, Sen. Sheila Leslie, D-Reno, chairwoman of the revenue committee, has promised daily hearings to fully vet the bills.