State question 4: Medical equipment sales tax exemption
October 17, 2016
Amendment to the Nevada Constitution
Shall Article 10 of the Nevada Constitution be amended to require the Legislature to provide by law for the exemption of durable medical equipment, oxygen delivery equipment, and mobility enhancing equipment prescribed for use by a licensed health care provider from any tax upon the sale, storage, use, or consumption of tangible personal property?
This ballot measure proposes to amend the Nevada Constitution to require the Legislature to pass a law that allows for the exemption of durable medical equipment, oxygen delivery equipment, and mobility enhancing equipment prescribed for human use by a licensed health care provider acting within his or her scope of practice from any tax on the sale, storage, use, or consumption of tangible personal property. The proposed amendment does not create an exemption of durable medical equipment, oxygen delivery equipment, and mobility enhancing equipment from these taxes, but rather requires the Legislature to establish by law for such an exemption. Pursuant to Article 19, Section 2, of the Nevada Constitution, approval of this measure is required at two consecutive general elections before taking effect.
A "Yes" vote would amend Article 10 of the Nevada Constitution so that the Legislature would be required to pass a law exempting durable medical equipment, oxygen delivery equipment, and mobility enhancing equipment prescribed for human use by a licensed health care provider from taxation related to the sale, storage, use, or consumption of the equipment.
A "No" vote would retain the provisions of Article 10 of the Nevada Constitution in their current form. These provisions do not require the Legislature to pass a law exempting durable medical equipment, oxygen delivery equipment, and mobility enhancing equipment prescribed for human use by a licensed health care provider from taxation related to the sale, storage, use, or consumption of the equipment.
Argument for passage
Medical Patient Tax Relief Act
A YES vote on Question 4 helps sick, injured, and dying patients and their families. It stops the Department of Taxation from imposing unnecessary sales taxes on medical equipment prescribed by physicians, such as wheelchairs, infant apnea monitors, and oxygen delivery devices. It will bring Nevada in line with the vast majority of states which do not tax this type of equipment for home use.
A YES vote would relieve the sales tax burden on medical equipment used by patients who require oxygen devices to live, such as those with cancer, asthma, and cardiac disease; babies who need protection from Sudden Infant Death Syndrome; children with cystic fibrosis on home ventilators; and hospice patients in their last weeks of life. Current Nevada law already exempts medicine and prosthetics because we have recognized how vital this relief is for our most vulnerable populations.
Question 4 simply seeks to extend this protection to critical medical equipment.
For insured Nevadans, this tax is contributing to the increasing co-pays, deductibles, and premium costs that are crippling family finances across the state. For uninsured Nevadans the impact is even worse: Sales tax on medical equipment can reach thousands of dollars for severely disabled patients, and it forces people to forego essential equipment prescribed by their doctors because they simply cannot afford to pay.
Fortunately, while this would have a significant impact on the patients and their families, there would be very little impact to state tax revenue. The Department of Taxation, itself, has estimated that a tax exemption on this medical equipment represents approximately 0.025 percent of the annual state budget.
Almost all people will need some sort of medical equipment in their lifetimes. Voting YES on Question 4 is the compassionate, and eventually prudent, thing to do. Join over 100,000 Nevadans who signed the petition calling for the end to this tax. It will help hundreds of families today and may help yours tomorrow.
Argument against passage
VOTE NO ON QUESTION 4!
Basic budget principles state that when expenses exceed revenues, debt is created. When the law requires state or local government agencies such as schools to be funded, the law expects a set amount of revenue to fund that agency. When a tax exemption reduces the amount of revenue expected, the agency has no choice but to request a replacement of the lost funding.
To do that the agency must depend on the Governor and the Legislature to include the lost funding in the budget.
Sales taxes pay for a myriad of services Nevadans rely on including schools, police, fire departments, libraries, and parks, to name a few.
Question 4 seeks to exempt durable medical equipment from sales tax. On the surface, this exemption seems like a good thing, providing tax relief to those in need. However, this exemption is really a wolf in sheep's clothing:
1. It is vaguely worded without clear definitions of what specific devices will be exempt and who will benefit, leaving such determination to the Legislature;
2. It decreases an unknown amount of revenue from an already strained budget, creating the need for higher taxes in the future; and
3. It uses the law to provide special privileges to a special-interest group at the expense of everyday taxpayers.
Tax exemptions have consequences for the taxpayer; the same consequences as tax subsidies, tax breaks, tax abatements, and tax incentives. The Nevada Department of Taxation's 2013-2014 Tax Expenditure Report states that Nevada has 243 such tax expenditures that cost taxpayers over $3.7 BILLION a biennium.
Who is footing the bill for all those exemptions? You, the local taxpayer. You should be mindful of the most recent government "giveaways," such as the approval of $1.3 BILLION in subsidies to Tesla, $215 MILLION in tax incentives to Faraday, and $7.8 Million in tax abatements to six different companies relocating to Nevada.
Ask yourself, is Question 4 just another "giveaway," and is there any follow-up to see if promises made for these "giveaways" are promises kept?
The question also needs to be asked, isn't this just another burden on Nevada taxpayers? If it isn't, why in 2003 and again in 2015 did our governors go after a BILLION-plus dollars in tax increases?
When the wolf comes huffing and puffing at your door, reject it. Vote NO on Question 4!
The above arguments were submitted by the Ballot Question Committee composed of citizens as provided for in NRS 293.252.