Business pushing services tax
April 9, 2003
Business owners say Nevada’s best tax option is a 5 percent levy on services.
On Tuesday, they presented a plan to the Senate Taxation Committee they argue would generate $400 million a year for the state of Nevada to balance its budget saying businesses would pay more than half of a services tax as they have designed it.
While spokesman Sam McMullen conceded sales taxes on products are volatile, he denied that is a problem with the selected services they plan to tax. McMullen said he has discussed the issue with different businessmen and concluded that “it’s very unlikely they’d drop services.”
“These are not the volatile pieces of the sales tax,” he said.
The tax would be imposed on such things as accounting, auditing and bookkeeping, publishing and commercial laundry, landscape maintenance, equipment maintenance and repairs, personnel supplies, legal fees and the like.
They argued taxing services is appropriate and will generate the revenue needed by the state as it grows and its economy changes.
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“There is an inexorable shift in spending from goods to services,” he said. “We are becoming a service-based economy and we believe the best tax you can have is one that’s based on your economy,” said Kara Kelley of the Las Vegas Chamber of Commerce.
She too argued the services tax would be more stable than existing taxes.
The other half of their plan is a 2.25 percent decrease in the sales tax on products over time so that both levies end up about 5 percent when local options are added in.
McMullen said this would mean a lower sales tax rate than any of the surrounding states and the drop should help draw business to Nevada.