Nevada Legislature: Gov. Brian Sandoval’s tax plan heads to Assembly
The governor’s plan to pay for his $7.4 billion General Fund budget is headed for its toughest test — the floor of the state Assembly.
AB464, including the controversial commerce tax passed out of the Assembly Ways and Means Committee Thursday night with just four Republicans opposed.
The bill imposes a business license fee of $500 a year for corporations and $300 for businesses who aren’t corporations. It raises the Modified Business tax from the 0.63 percent it would be if the current increase were allowed to sunset to 1.475 percent.
And it imposes a commerce tax designed to capture revenue from all those businesses who currently escape the business tax including foreign corporations.
Altogether, the tax plan is projected to raise $755 million in revenue to help balance the budget and fund the governor’s ambitious education plan. Above the money already generated by the business license fee and MBT, the tax includes $262 million in new revenues.
While it cleared Ways and Means with strong support overall, the plan faced a tougher road on the Assembly floor where it must win at least 28 votes — two thirds of the 42 members — to pass.
If backers can get that many votes, the tax would go to the Senate where it’s expected to have an easier road to approval.
Though several Republicans on the committee balked at approving an expanded tax plan, Assembly Majority Leader Paul Anderson said lawmakers have already approved a budget that relies on more revenue to substantially increase K-12 education funding.
“I think we built a budget here in this committee we hope will change the landscape of education in this state,” he said. “It’s time to move the discussion on how to fund those investments.”
Republicans Derek Armstrong, Jill Dickman, Robin Titus and Chris Edwards voted against the proposal, expressing concerns any tax based on gross receipts would be unacceptable to voters. Armstrong, who worked with Anderson to develop an alternative to Sandoval’s initial tax plan, said his concerns on the so-called “Commerce Tax” portion of the new plan drove him to vote no.
“I really appreciate the governor coming to a compromise and coming halfway, but I just couldn’t get there with this bill,” he said.
Several of those “working” the bill said Thursday they expect the tax plan will eventually win approval and allow the Legislature to adjourn sine die on June 1.
The governor’s staff has been lobbying the measure heavily since the compromise plan was introduced more than a week ago.
But with just four days left before the end of the 120-day session, backers were up against the wall since, past a certain point, the mechanics of closing down the session and finalizing the budget threatened to make that goal impossible.
The five bills that implement the budget and, effectively make the end of session possible are expected to begin appearing today. However, a couple of them – the “pay bill” that sets both classified and unclassified pay rates for the coming two years — may not appear until the weekend.
The others are the Appropriations Act setting out spending of state funds, the Authorizations Act spending federal, highway and other non-state money, the education bill — which, not incidentally, must be passed first — and the Capital Improvement Projects bill.
Lawmakers unveil plan to close entertainment tax loopholes
Lawmakers are unveiling changes to Nevada’s live entertainment tax they say would capture revenue from an evolving entertainment landscape and close confusing loopholes.
Republican Sen. Mark Lipparelli presented the much-anticipated changes on Thursday as an amendment to SB266.
The bill proposes a 9 percent tax on live entertainment and an 8 percent rate for boxing matches. The existing system imposes a 5 percent or 10 percent tax depending on the size of the venue.
The measure would include escorts but not prostitutes, and also clarifies outdoor entertainment events such as festivals would be taxed.
The bill is expected to get a committee vote today.
The Associated Press contributed to this report.