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March 1, 2015

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Gov. Brian Sandoval straddles the line on promise to not raise taxes


Cathleen Allison / Associated Press

Gov. Brian Sandoval, right, talks with advisers Dale Erquiaga and Heidi Gansert May 3, 2011, at the Legislature in Carson City. Sandoval’s extension of temporary tax increases to fund education shows his moderate tendencies.

Promising not to raise taxes — no how, no way, under any circumstance — might have seemed the smart political move for Brian Sandoval in 2010, when he was running in the Republican primary for governor.

But now that he’s running a state that is less than flush with tax dollars, he keeps bumping up against the line in the sand he drew as a candidate.

The latest is the agreement he reached with Amazon, under which the online retail giant will start collecting sales tax in 2014. Under the deal that Sandoval and his top staff personally struck with company executives during a meeting in the governor’s office earlier this year, Nevada will become just the seventh state to require the retailer to collect the tax.

The deal will be a $16 million-a-year coup for Nevada and was praised by the brick-and-mortar retailers as leveling the playing field with online companies, many of which don't collect the tax at all.

But it will also muddy one of his administration's talking points — that no Nevadan will pay more in taxes than they did when he came into office.

Predictably, the brickbats came flying in from the right, which pointed to Sandoval’s promises not to raise taxes when he ran for office.

Click to enlarge photo

Chuck Muth

“Nevadans absolutely will be paying higher taxes after the deal takes effect than they were paying before Sandoval was elected,” wrote conservative political consultant Chuck Muth on Monday, while also noting that technically, it’s not a new tax since individuals are supposed to send the state tax department a check for online purchases.

Conservatives also noted that these hedges aren’t necessarily a deal killer for Sandoval the candidate, who has managed to remain popular with the Republican base despite repeatedly reversing himself on taxes.

This is not the first time that Sandoval has been forced to explain his policies against the backdrop of what he said during the campaign.

At the end of the 2011 Legislative session, Sandoval agreed to extend $620 million in taxes that were scheduled to sunset — taxes he had promised to let expire. But near the end of the session, a Nevada Supreme Court ruling jeopardized some budget gimmicks he had used to fund his spending plan, prompting his reversal on the sunset.

In February, Sandoval said he'd support extending those taxes yet again, raising the hackles of the state's fiscally conservative watchdogs.

But Sandoval argued the state needs the additional revenue to pay for increasing federal health care mandates. And he says he’s still shackled by the Nevada Supreme Court ruling, which he says prevents the state from taking local government money.

To justify the sunset decisions, Sandoval and his administration repeatedly sound this common refrain: No Nevadan will be paying higher taxes than they did when Sandoval took office.

That’s not true of the deal Sandoval struck with Amazon. In Clark County, residents will pay 8.1 percent more for their purchases on Amazon.

Nevada joined South Carolina, Indiana, Virginia, Tennessee, California and Texas as the only states where Amazon is voluntarily collecting sales tax, according to the company. The company declined to discuss the agreement in further detail, as did Sandoval’s administration, citing confidentiality of tax agreements.

But on “Face to Face with Jon Ralston,” Sandoval explained that the agreement came about because the Retail Association of Nevada, which represents large stores like Best Buy and Wal-Mart, along with small retailers, approached him before the start of the 2011 session.

He said in the interview that small businesses were being hurt by online stores that don’t collect sales tax.

He also said that it’s not a new tax because individuals are supposed to be sending in their use tax to the state’s Department of Taxation.

Tax Department Director William Chisel said that “rarely happens.”

(A spokeswoman for Sandoval said: “To the best of his recollection, the governor has not made purchases subject to the tax, so he has not paid it. He had made online purchases at Apple and, which collect the tax and which he paid.”)

But right now, Sandoval doesn’t need to worry about challenges from the right.

Robert Uithoven, a GOP consultant, said Sandoval has helped raise money for Republican candidates and has been active at party events.

“He has built up so much goodwill, he can make decisions the base may not like, and they will not hold it against him,” Uithoven said.

Even Muth said that Sandoval’s decision to support extending the sunsetting tax won’t cause him to face a primary challenge in 2014, when he’s up for re-election.

He’d have to do something “terribly egregious” during the legislative session, which starts early next year, Muth said.

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  1. Uithoven seems to suggest that "the base" won't hold this tax decision against Sandoval because he helps "raise money" for GOP candidates. For a GOP Consultant are all political decisions about quid pro quo? If so, fire this man. I don't hold this decision against Sandoval because it is reasonable and fair, not because of some political calculation. Nevada has a sales tax-based system. Bricks-and-mortar stores, with their last dying gasps, have a right to demand equitable tax treatment. None of this will stop me from shopping at Amazon or cause me to decide that Sandoval needs replacing. It causes me to decide (again) that our GOP party in Nevada is the one who needs to be replaced.

  2. The FACTS are this: by 2014, Amazon can move it's distribution center to Utah, or any other State, many of which will pay for the move. (Nothing new, in the past, catalog orders would have tax added if you lived in certain States.)

  3. Wow, a Republican taking a page out of the Democratic play book; a new enforcement on an existing tax is not a new tax or a raise in taxes. It is an increased COLLECTION of existing taxes resulting in increased REVENUE. Brilliant! Now he needs to figure out a way to increase the collection of business taxes. The new auditors for the governor are all about collecting EXISTING severance taxes. (severance=mining)

  4. Dumbocrats are all for raising/imposing taxes except - when they aren't. And they aren't when someone else beats them to it. I, on the other hand, am against their "tax & spend" mentality at all times. And I am against the coercion of Amazon into imposing a new tax. We need to "impose" the idea on government bureacrats that they, like we, must tighten the belt when times get tough, not simply gouge us for more money.

  5. The reason people don't like this "tax" is because, like tax on wages, it is preemptively taken from them and they have no say in the matter. Worse, there's nothing you or I can do about it. If you subscribe to the popular myth that you can "vote the bum out" and somehow erase the deal, you might be new to this planet.

  6. Kudos to the governor once again for putting the needs of Nevadans ahead of partisan dogma.

  7. Enjoyed the article.

    Looks like the Governor has painted furiously on the floor, making sure the layers are appropriate, he hit every spot, then he puts the paint brush back in the bucket, stands up, looks up in hopes that he has done a wonderful paint job, then his eyes go wide and he realizes he has painted himself into a corner.

    I actually do not care what his fellow Tea/Republicans think of him. Other than I hope they rip each other apart criticizing.

    But the thing about this Amazon deal that is foul smelling, and Tea/Republicans won't see this, even if you point it out to them, is that fact that the consumers of Nevada, the regular people who actually buy stuff, are being hit with another tax. Governor Sandoval's precious rich people are untouched. Just the average hard working jill's and joe's are the ones that gotta pay more.

    So, I guess in Nevada, according to Governor Sandoval, there are NO NEW TAXES for the rich, but he circumvents that by taxing the crap out of everyone else!

    I think the pressure should be amp'ed up on Governor Sandoval. I never voted for him. I thought he was a bum before and I still think he's a bum. And I still think this Governor thing is his secondary job. His first job is in the employ of the lawyer/lobbyist firm of Jones Vargas that has a history of running interference for Nevada mining. Thanks to their loyal employee, mining interests in Nevada WILL NEVER EVER pay their fair share of taxes to this State. And in turn, they get to not only take what they get out of the ground out of Nevada, but out of this country (Canada).

    I'm not fooled by this bum.

  8. Get on that change to sales and use tax--to encompass all products and personal services on a level playing field instead of exempting and favoring some industries over others. Let the taxes sunset SOON.

  9. The fact is that once again our national laws are all over the place.
    Apple has and will always pay what they legally owe. If we want to straighten out this mess we need to say to corporations YOU CAN ONLY HAVE 1 TAX ENTITY PERIOD.
    With regard to amazon they have been getting away with bloody murder. .For example if I order an apple product from Apple and they have a retail store in the state I have to pay the sales tax. If I order the same Apple product from a retailer in another state who doesn't have a retail store in my state there is NO TAX. Considering that APple products are expensive the tax savings or expense can be considerable.
    This makes the best case for having FEDERAL LAWS in place that override the states. Yet ask the Republcans and they will say that we need more states rights. If you want to continue with that argument then don't rail against any mfgr that is paying less in taxes that you deem as unfair. Change the law. Corporations in this case are no different then individuals in an attempt to SAVE themselves with a legal tactic to avoid unnecessary expenses.
    The Hypocrites which is what most Republicans are will complain about the situation yet with a smile on their faces will obstruct changing the law

  10. FYI Marvin -

    You say "If I order the same Apple product from a retailer in another state who doesn't have a retail store in my state there is NO TAX."

    You are completely wrong. There is a tax. It is called "use tax". The amount is exactly the same as the sales tax would have been had the retailer collected it from you, and you are legally required to pay it to the state whether you are aware of the law or not. Whether you choose to follow the law is up to you.

    Here's another example. Go to New Hampshire. Walk into a Best Buy and buy as much as you want because, in New Hampshire, there is no sales tax. Bring your new toys back to Nevada, and guess what? You owe use tax to Nevada. Not a new tax, not a new law.

    Furthermore, sales tax is not an expense of the retailer or the manufacturer. They collect it from the customer, and remit it to the state.

  11. Every one of you who, in response to the Amazon deal, keeps saying that Sandoval lied, has no idea what a LIE is.

    He said he wasn't going to raise taxes. The Amazon agreement does NOT raise taxes. Therefore, with regard to the Amazon deal, he did not lie.

    While I'm sure he has told dozens of whoppers in the past few years, this was not one of them.