LVN Editorial: State taxation taketh away county money
October 10, 2013
The Department of Taxation crunches monthly sales tax numbers in hopes Nevada shows an increase in extra revenue.
That reporting from the Department of Taxation, though, looks like a Ponzi scheme telling Nevadans that the counties generated millions of dollars in tax revenue, thus showing the economy is robust.
The monthly reporting is misleading, though, because the Department of Taxation does not paint a clear picture.
In its short-sighted wisdom and in order to draw businesses to Nevada, the Legislature voted to grant certain businesses — for example, alternative energy — tax abatements if they built their plants in the state. Churchill County, for example, became a favorite location to build because of its natural resources. The union has not produced a marriage in heaven but a contentious relationship.
The information from the last Department of Taxation report looks good: Churchill County had a 9.5 percent increase for the month to $30.2 million. The Utilities category more than doubled to $4.77 million as did Specialty Trade Contractors at $1.5 million. Construction of Buildings saw a massive increase from just $60,000 a year ago to $1.96 million this June.
Instead, let's examine the real figures: The Department of Taxation showed Churchill County earning $30,195,148 for June 2013, but after the state took $3 million in abatements, the figure will be about $332 less than June 2012. Likewise, the state snatched almost $67 million in taxable sales from the yearly total of $387.5 million, showing the final amount slightly above the 2012 total of $320.1 million.
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In May, taxable sales released by the Department of Taxation as $35,698,560, but the state then took back a little more than $15 million. Instead of a gain for the month, the county experienced a significant loss. The Nevada Department of Taxation showed Churchill County with a 148 percent increase in April for the same time one year ago. In 2013, the taxable sales showed the county receiving $48.490,346 over the 2012 figure of $19,512,317. After readjustment, the figures for Churchill County's taxable sales will be $25 million less than what the Department of Taxation released.
If the figures are showing Churchill with a loss after tax abatements, then about six to seven counties involved in Green Energy are also giving back millions of dollars to the state in taxable sales.
Our take: The Department of Taxation must be more honest when reporting taxable sales; the governor must step in to ensure taxable sales numbers do not mislead; and during the next Legislature, counties must tell lawmakers no more tax abatements. Counties are struggling financially, and the state is doing nothing to rectify the problem. It's time the state recognizes it.
Editorials written by the LVN Editorial Board appear on Wednesdays.