Initiative filed to raise tax on casinos

By David McGrath Schwartz (contact)

Tuesday, Feb. 7, 2012 | 4:58 p.m.

Nevada’s tax on its largest casinos would jump from 6.75 percent to 9 percent under an initiative filed Tuesday by a conservative businessman.

The tax, which would apply to casinos that make $250,000 or more a month, would raise millions of dollars more for the state. But its real aim is to put the powerful gaming industry, which has supported broad-based business taxes in the past, on the defensive.

The statutory initiative is being pushed by Monte Miller, the conservative Henderson businessman who has also filed an initiative to change the state’s constitution and allow mining’s tax to be raised.

While raising the gaming tax — which generated $650 million last fiscal year — would generate hundreds of millions for state services, all this is happening in a broader fight over taxes.

Labor is courting gaming and mining right now to back an initiative they are finalizing to present to the Legislature in 2013. That would be a margins tax on businesses, styled after Texas’ franchise tax.

Miller, in a statement, said the increased tax would allow the legislature to “lower taxes and fees on individuals and small businesses who are struggling during these tough economic times. ... Nevada’s individuals and small businesses are overtaxed.”

Miller formed the ballot advocacy group Nevadans for a Fair 9 Percent Gambling Revenue Tax to give voters an option from the business margins tax, he said in a statement.

“We are providing voters with a reasonable approach to tax reform that does not harm small businesses,” he said.

Nevada, the home of the nation’s legal gambling industry, has the lowest tax rate of any state and other jurisdictions generate more revenue than Nevada.

Miller pointed to other states, such as Indiana, which raise more money from their casinos than Nevada, and others such as Illinois, which have much higher tax rates.

Any efforts to raise the tax would be fought heavily — first in court, then at the Legislature and finally, if it gets to it, at the ballot box.

“This initiative represents a 33 percent tax increase on the gaming industry, which would be reckless and irresponsible,” said Virginia Valentine, president of the Nevada Resort Association. “We are currently reviewing the language. If this effort is indeed legitimate, we will oppose it vigorously.”

Raising the gaming tax will require Miller to collect over 70,000 signatures by November. It would then be presented to the Legislature in early 2013, when lawmakers next meet. If they rejected the proposal, it would go on the ballot in 2014.

If it’s approved by voters, it would go into effect on Jan. 1, 2015, according to Miller’s petition.