Nevada income tax bill met with opposition | TahoeDailyTribune.com

Nevada income tax bill met with opposition

GEOFF DORNAN

CARSON CITY, Nev. -The hearing into Assemblywoman Peggy Pierce’s proposed corporate income tax revealed very little common ground between those for and those against.

Assembly Bill 336 would impose a 4.5 percent corporate income tax on businesses with net profits in excess of $500,000 a year.

Craig Stevens of the Nevada State Education Association said only a small percentage of businesses would pay but the tax would pump $1.2 billion into state coffers during the biennium.

The proposal raised immediate objections from two Republicans on the Assembly Taxation Committee. Pete Livermore of Carson City said he operated small businesses in the Capital for 35 years.

“I probably earned less than your salary,” he said.

Assemblyman John Ellison of Elko asked Stevens if he had ever had to make payroll for employees.

Pierce, D-Las Vegas, said the state needs to afford a quality of life for all its citizens.

“I appreciate the part small businesses play in the life of this state but I don’t believe the experience of small business is the only thing we should take into account,” she said.

A series of business representatives testified the corporate income tax isn’t the way to go. Carole Vilardo of the Nevada Taxpayers Association told committee members there are numerous flaws and technical problems with the bill. She said after 9/11, corporate income tax revenue was down 25.5 percent in states that had it.

“You are not looking at a stable revenue source,” she said.

Bryan Wachter of the Retail Association of Nevada said if a corporate income tax is added to the business owner’s burden, “something else will have to be cut.”

Wachter said raising prices isn’t an option for most small businesses because of competition – particularly from the Internet. He said other costs such as mortgages or rent and utilities aren’t under the businessman’s control. He said that leaves employee pay.

“When business is faced with paying this new tax, employees will face fewer hours and lower wages,” Wachter said.

Trey Abney of the Reno-Sparks Chamber of Commerce said the business tax isn’t broad based and has proven very unstable during economic crisis.

Sam McMullen representing the Las Vegas Chamber of Commerce said the way the bill is written actually invites legal challenges.

“The worst way to balance a budget is on the back of a lawsuit,” he said.

McMullen said the proposed tax would slow economic recovery by taking away money needed to stabilize and expand business.

“It’s making the statement that the state wants the profits rather than putting them into the business,” he said.

Assemblywoman Teresa Benitez-Thompson, D-Reno, said rather than working with lawmakers to repair Nevada’s tax system, opponents seem simply opposed to any tax.

She pointed out that the proposed tax rate would be lower than the business tax imposed in any of the states surrounding Nevada. She said the tax would only be on companies with net profit of more than $500,000.

Benitez-Thompson said if other states have higher rates, “and the sky is not falling, then how come the sky would fall in Nevada?”

The committee took no action on the measure but Chairwoman Marilyn Kirkpatrick D-Las Vegas, asked Vilardo to meet with legal staff to repair some of the technical issues she raised.

ONLINE

For more coverage of the 2011 Legislature go to nevadaappeal.com/legislature


Support Local Journalism

Your support means a better informed community. Donate today.


News


See more