Treasurer Schwartz calls for corporate income tax
Nevada Treasurer Dan Schwartz has submitted a bill draft request that would create a corporate income tax.
But he said at least initially, his plan would be revenue neutral because it eliminates the Modified Business Tax — a payroll tax — the commerce tax passed by the 2015 Legislature and other smaller tax levies business now pays.
“Part of the story here is we are attempting to propose a change in the pre legislative session rather than just passing bills in the last days of the session,” he said.
Nevada’s constitution prohibits the state from enacting a personal income tax without voter approval but permits the governor and lawmakers to create an income tax on businesses.
He said he wants a less confusing financial revenue system for the state and “a more broad based tax.”
The corporate income tax, Schwartz said, would achieve that goal.
“And as a side benefit, it would go after some of those companies that use Nevada as a tax shelter,” he said.
He said he’s referring to companies who incorporate here but do almost nothing else in Nevada.
“It’s fine that Google and Apple make lots of money but pay your taxes,” Schwartz said.
To anti-tax advocates, he said, “government has to be financed.”
He said both the payroll and gross revenue commerce tax are “poor taxes.”
He said taxation and other experts would have to study how much the tax would generate at different rates but that it would be much simpler to administer than the commerce tax because it could be bills from the corporations’ IRS forms.
Asked what kind of reception he thinks the plan will get in the Legislature, Schwartz said he hopes it will get a fair hearing.
“This state has to begin transitioning to a more stable revenue platform,” he said.