Appeal filed to block repeal of Nevada commerce tax
January 28, 2016
The group seeking to defend the controversial commerce tax has appealed the district court's decision to the Nevada Supreme Court.
The group, in favor of the commerce tax, is asking the Supreme Court to overturn District Judge James Wilson's ruling that the measure — to repeal the tax — could go on the ballot.
Unlike a broader petition to repeal the entire 2015 tax package, the petition spearheaded by Controller Ron Knecht survived a legal challenge after Wilson ruled against proponents on nearly every score.
Wilson said those seeking to repeal the tax shouldn't have to find money to make up the lost revenue from the tax on business gross revenues. He said that would place a huge burden on anyone attempting to repeal a tax.
He also rejected the argument by the Coalition for Nevada's Future that the petition is void because its Description of Effect doesn't tell voters that a "yes" vote would repeal the tax but that a "no" vote would essentially etch the commerce tax in stone.
In the appeal brief filed Monday, Coalition lawyers Kevin Benson and Matt Griffin also argued the Description of Effect must explain that, if the petition succeeds, lawmakers must either replace the $121 million it is expected to generate or reduce expenditures.
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They repeated their arguments that far too many elements of the referendum petition are administrative details which are prohibited in any petition. They believe it should be rewritten as an initiative petition so that, if voters uphold the tax, it doesn't set the conditions of the petition in stone, alterable only by voters in the future.
"A referendum that contains administrative provisions is therefore void because it goes beyond approving or disapproving of the policy of the state and instead risks enshrining into law the smallest bureaucratic details," they argued.
A key argument they raise in the brief is the one issue Wilson didn't decide, saying it wasn't legally ripe: whether the petition is invalid because it would unconstitutionally unbalance the state budget approved by the 2015 Legislature.
"As the holder of the state's purse strings, the Legislature passed the budget and the commerce tax was necessary to raise the revenue required to fund expenditures over the next two years," they wrote.
They pointed out that under the state Constitution, the Legislature has no power to repeal a tax that is part of the current budget without raising revenues to replace it or cutting expenditures.
Since the petition power is coequal with that of the Legislature, "the people likewise cannot repeal a tax that is part of the Legislature's 2015 annual budget."
Finally, they argued the petition is invalid because it is a referendum on a Senate Bill, not a statute.
If the petition survives the legal process, Knecht and his backers will have to collect at least 55,234 valid voter signatures including at least 13,809 in each of Nevada's four petition districts — the state's congressional districts — to put it on the November ballot.