Nevada businesses come up with new tax plan
Nevada businesses, eager to avoid a gross profits tax being touted as a possible solution to the state’s growing budget shortfall, came out Thursday with their own tax plan.
The new plan would raise about $384 million in new revenue from the business community in the coming two fiscal years — roughly half of the minimum new revenue need described by Republican Gov. Kenny Guinn.
In supporting a batch of higher taxes, the business group also suggested a slight cut in sales taxes. And Sam McMullen, a spokesman for the group, said there could be support for higher taxes “if the need is firmly established.”
Sources of the new revenue in the plan include an existing business license tax that, if doubled, would produce another $160 million. Adding sole proprietors to those who pay the license fees would bring in another $52 million.
While the businesses don’t back a special task force’s endorsement of a gross business profits tax, the group does support the panel’s suggestion that property taxes could be raised by 15 cents per $100 of assessed valuation. That would produce $90 million of the new money in the business plan.
“The group doesn’t feel that business is responsible for paying every dollar of the shortfall,” said McMullen. “We have come up with a plan that’s spread across all taxpayers and funds the future of this state.”
Ray Bacon of the Nevada Manufacturers Association added that the proposal shows the business community “is more than stepping up to the plate.”
“What we’re talking about here are ‘now’ revenues. Every other plan is talking about future revenues. But future revenues don’t solve today’s problems.”
Besides Bacon’s association, supporters of the plan include the Las Vegas Chamber of Commerce and associations representing contractors, trucking firms, retailers, banks, independent businesses, resident agents and others.
The proposal had been submitted to the governor, and Greg Bortolin, Guinn’s press secretary, said, “This, like everything else, is something that will be considered and studied as the governor puts his budget together.”
The plan also is going to all state legislators — nearly half of them in private meetings held Wednesday and Thursday in Las Vegas and Reno.
Senate Majority Leader Bill Raggio, R-Reno, termed the plan “worthy for us to look at and it ought to be looked at, as well as the task force recommendations.”
“We’re not going to be prioritizing any of this until we hear what the governor comes out with,” Raggio added. “We want all the options on the table.”
Other revenue sources not mentioned by the business group include “sin” taxes on alcohol and tobacco products. Guinn has said legislators could vote on such levies immediately after the start of the 2003 session in February.
But the group did support a transaction tax on services, saying that could produce hundreds of millions of dollars — and businesses would pay 40 percent or more of the money.
The service tax wouldn’t be imposed on medical services, drugs, day care, rent and mortgage payments, energy and other items deemed necessary “for a minimally acceptable standard of living,” the business group said.
Regarding the gross receipts tax, the group termed it “grossly unfair, discriminatory and punitive.” The businesses also oppose a net income or profits tax.