Capping tax credits doesn’t require 2/3 majorities, Nevada Supreme Court rules

The Nevada Supreme Court building Monday, March 4, 2019.

The Nevada Supreme Court building Monday, March 4, 2019.
Photo: David Calvert / The Nevada Independent

The Nevada Supreme Court on Thursday unanimously ruled that a legislative decision capping tax credits for low income education scholarships did not violate the constitutional requirement that tax increases get a two-thirds majority in the Legislature.
Groups and parents receiving those credits claimed two-thirds in each house was required because moving the revenue to the General Fund increased state revenue there unconstitutionally.
But the high court, in an opinion by Justice Jim Hardesty, ruled that what the legislation did was move existing Modified Business Tax revenue and that, doing so, didn’t produce new or additional public revenue.
“AB458 does not change the amount of money that businesses owed under the MBT payroll taxes,” the opinion states.
Instead, it says the bill eliminated future increases to the tax credit program. That, according to the opinion, was a reallocation of existing public funds, not an increase in state revenues and therefore did not require a two-thirds vote in the Assembly and Senate.
The tax credit program allowed businesses to offset some of their MBT payroll tax debt by contributing to public education programs and providing scholarships to low income students.
The opinion concludes that the legislation only, ”changes how much of the MBT payroll tax money is allocated to fund (the tax credit program),” but doesn’t increase the amount of state revenue.
The opinion also points out that, while those credits won’t increase, the program still qualifies for more than $6 million a year in state tax credits.


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