New details emerge about governor’s tax proposal

By Cy Ryan

Tuesday, Jan. 20, 2015 | 2:58 p.m.

CARSON CITY – Gov. Brian Sandoval is putting the finishing touches on his estimated $570 million tax-increase package that would hit cigarette smokers, slot route operators, the mining industry and other businesses.

The biggest share would come from a gross receipts tax that would cost businesses from $400 to $4 million. The top of the scale would be paid by companies that gross $1 billion or more a year.

Companies now pay a $200 a year business license fee. That will be eliminated and the new tax would be based on the type of business and gross receipts.

Julia Teska, director of the Department of Administration, outlined Sandoval’s $7.3 billion, two-year budget today for members of the Senate Finance Committee and the Assembly Ways and Means Committee in advance of the Feb. 2 start of the legislative session.

Today’s meeting outlined new information about raising an additional $133 million to help fund the state’s education programs with $882 million over the next two years.

The details about the funding boost follow Sandoval’s state of the state address last week.

In his speech, the governor outlined a plan to spend nearly $1 billion on education over the next two years. He wants to raise $437 million of that by increasing business fees, he said in his speech.

As part of the governor’s plan, the tax on a pack of cigarettes would be increased from 80 cents to $1.20.

Slot machine route operators who have 500 machines or more or whose revenues are $10 million or more would be hit with a gross revenue tax, similar to that paid by casinos.

The change would also apply to a the operators slot parlors where the total number of machines is more than 500 or the gross win exceeds $10 million.

Casinos already pay a tax on their gross win. But they would have to pay the gross receipts tax on other revenues, such as entertainment, rooms and food.

The tentative plan calls for a 1.17 percent payroll tax paid by mining companies to be increased to 2 percent. That is expected to bring in $14.6 million over the next two fiscal years.

The gross receipts tax would yield an estimated $437.5 million and the slot tax would produce $39 million over the next biennium.

The governor also plans to make permanent so-called sunset taxes imposed in 2009 and due to expire June 30.

If the sunset taxes are not extended there will be a loss of $600 million in revenue over the next two years, Teska said.

Teska told the members of the committee the administration is keeping a “tight rein” on adding state workers. The present number of 18,406 would increase to 19,048 next fiscal year and to 19,229 in 2017.