Nevada Legislature: Gov. Brian Sandoval’s business license tax approved
April 21, 2015
On a 17-4 vote, the Nevada Senate on Tuesday passed Gov. Brian Sandoval's business license tax.
The only four votes against the $438 million tax hike were cast by Republicans: James Settelmeyer, Scott Hammond, Pete Goicoechea and Don Gustavson.
"Today we are voting to make an historic, targeted investment in the modernization and reform of our K-12 education system," said Majority Leader Michael Roberson, R-Las Vegas. "This is about real tax reform that broadens our tax structure and makes our tax structure more fair and equitable."
But Gustavson, a long time opponent of tax increases, described the tax as "just a foot in the door."
Even Gustavson conceded more revenue is needed but said the governor's plan would disproportionately hurt small businesses.
"Once they pass this tax it's going to continue to grow and grow and hurt our businesses," he said.
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But Greg Brower, R-Reno, rejected those he said were ringing their hands and having sleepless nights because the tax issue was so hard.
"This is not hard," he said. "Nothing we do in this building is that hard. It's time and it's not just about education funding. It's about funding everything else the state has to fund."
Debbie Smith, D-Sparks, said this issue was one of the reasons she fought her way back to the building following brain surgery.
"It's time we act and do something about it," Smith said.
Tick Segerblom, D-Las Vegas, commended the governor for bringing the tax plan but said he was reminded "he invited us up here last September to give away a billion dollars" — a reference to the special session giving tax credits to Tesla. Segerblom said this tax hike for education in part makes up for that.
SB252 creates a license tax on all businesses in the state with different rates based on their code under the North American Industry Classification System (NAICS). Jeremy Aguero of Applied Analysis, who helped develop the plan, said NAICS takes into account the type of business and its profitability in imposing the tax. Instead of just the small number of businesses that pay the current business tax, it would hit all 330,000 businesses in Nevada — both goods producing and service businesses.
The only exemptions would be for federally certified non-profit corporations although health care providers including hospitals would get a break.
Because SB252 raises taxes, it required a two-thirds super majority to pass each house. In the senate, that is a minimum 14 of 21 members. The bill is expected to have a tougher time in the Assembly where it will need 28 of the 42 members' support.