Democrats produce new rebate plan
May 12, 2005
Assembly Democrats on Thursday produced another version of a $300 million rebate to Nevadans – a fuel tax rebate that draws on elements of previous plans and aligns the Democrats with Republican Gov. Kenny Guinn on the dollar amount.
The one-time rebate, to be issued on July 1, would give any adults with a valid Nevada driver’s license or identification card a rebate of $175 to $200. Proponents said the big difference between this and the previous plans is that recipients wouldn’t have to pay federal taxes on the rebate.
Assembly Speaker Richard Perkins, D-Henderson, and Assembly Majority Leader Barbara Buckley, D-Las Vegas, outlined the latest of several proposals all aimed at returning to Nevadans a chunk of the big surplus that has developed as a result of higher taxes imposed in 2003.
“This makes sure the IRS is out of it,” Buckley said, adding that the lawmakers’ chief legal counsel and a lawyer who’s expert in tax law were consulted to ensure people who got the gasoline tax rebate wouldn’t have to declare it as taxable income.
Sen. Bob Beers, R-Las Vegas, said there is a way to eliminate any tax liability and simultaneously cut the state’s administrative expenses in making the rebate.
Beers, a certified public accountant, said the state should include a voucher for 100 percent of each Nevadan’s vehicle registration renewal, up to $300 maximum, with each renewal mailing in fiscal year 2006.
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“By reducing a future expense, the voucher plan avoids creating taxable income,” he said. “The cost of administering a rebate is minimized with rebate vouchers as well.”
He said the state would escape the cost of calculating and issuing checks for each vehicle as well as the cost of mailing them.
Perkins said the latest plan has “bits and pieces from many ideas” that had been floated previously. That includes a plan from Senate Minority Leader Dina Titus, D-Las Vegas, to give everyone 18 or older who held a driver’s license or state identification card as of May 1 of this year a $150 check.
The Assembly Democrats’ plan would apply to anyone 18 or over who had a license or state ID card as of Jan. 1, and provides $25 to $50 more. Both would rely on state Department of Motor Vehicles licensing records to get the money to about 1.6 million eligible Nevadans.
Buckley said Nevadans who didn’t want or need the rebate could designate some state service, such as education or social services, that would get the money.
“We’re not in an argument with the governor,” Buckley said, adding that there’s agreement on a rebate in the $300 million range.
Asked to comment on the Assembly plan, Guinn said he hadn’t had much time to review it but it met two of his most important objectives: that the rebate amount to $300 million “without a doubt,” and that it get to as many Nevadans as possible.
But Guinn said he still had concerns about tax liability, and wanted to see a requested IRS opinion on the rebate proposals. He also said that his plan for rebates of vehicle registration fees would help small businesses more than the Assembly plan would.
“I’m not downplaying it,” Guinn added. “I’m happy we have an alternative plan.”
Guinn’s comments were more conciliatory than his remarks Wednesday, when he said some critics of his proposal were “putting up a smoke screen because they would rather spend this $300 million rather than give it back to the taxpayers.”