Gambling industry, Vegas chamber clash over possible tax plan
LAS VEGAS — Two of Nevada’s most powerful interest groups are preparing for a legislative fight over a plan to increase business taxes to make up a big state deficit.
Casino executives back a gross receipts tax on every business in the state making $350,000 a year or more.
The Las Vegas Chamber of Commerce opposes the tax, which would be the first receipts tax for many businesses in the state.
Both Terry Lanni, chairman and chief executive of gambling giant MGM Mirage, and Phil Satre, chairman of casino owner Harrah’s Entertainment, said they would lobby lawmakers on behalf of the business tax.
“From our company’s standpoint, we are very supportive of the gross receipts tax,” Lanni told the Las Vegas Sun. “In the spirit of equality and fairness, it’s time for the other businesses and companies in Nevada to come to the table.”
Satre, the new chairman of the Washington, D.C.-based American Gaming Association, said he has supported the gross receipts tax since the idea was first discussed.
It would impose a .25 percent tax on business receipts over $350,000.
“We have significant needs in this state, whether they are in education or health care or otherwise,” Satre said. “They can’t be addressed solely by the gaming industry.”
Kara Kelley, the chamber’s president and chief executive, said the chamber and casino industry agree the state needs more money.
“We happen to agree that there needs to be more money for education,” Kelley said. “The one thing we’re in disagreement on is this one particular tax.”
The Governor’s Task Force on Tax Policy recommended the tax as a potential source of new revenue to fill a $704 million deficit in the coming two years.
The business community, led by the Las Vegas and Reno chambers, has strongly opposed the tax, saying it cannot be fairly applied to different businesses.
“We’re going to go to the Legislature and make our own cogent arguments and have that as part of a very healthy policy debate,” said Kelley.
Gov. Kenny Guinn will unveil his budget as part of his State of the State address Monday in Carson City. The governor has not said whether the gross receipts tax will be a part of his budget, however he has indicated the state needs at least $704 million in new revenue to stay even.
The total tax hike sought in his State of the State address could top $1 billion, including increased taxes on cigarettes, liquor, property and gambling, plus new taxes on business and amusement activities.
Gambling officials have said they will accept a quarter percentage point increase in the gross gaming tax — from 6.25 to 6.5 percent — and would pay the gross receipts tax on non-gambling revenue.
Ted Jelen, chairman of the political science department at the University of Nevada, Las Vegas, said he thinks the 2003 legislative session is setting up to be “nasty” because of the heavy lobbying from the powerful groups.
Jelen said he thought that by the end of the 120-day session, the gambling industry would prevail in its call for a gross receipts tax.
“They are pretty clearly the more powerful player,” Jelen said. “As the more regulated industry, they are more sophisticated about making their points, especially when money is concerned.”