Tax task force continues business tax debate but puts lottery aside
CARSON CITY — Nevada is a step closer to solving its budget crisis.
The Governor’s Task Force on Tax Policy made progress Wednesday by eliminating a few ideas from the list of possible tax hikes, while solidifying support for certain increases.
The proposed gross receipts business tax that would provide most of the estimated $350 million a year needed to match state revenues to needs continued to draw protests.
The idea of a state lottery supported by task force member Luther Mack of Reno was set aside for further study. Chairman Guy Hobbs agreed “there seems to be a lot of public appeal for a lottery.” He said the problem is it would take five years to change Nevada’s constitution to permit a lottery.
“In the near term, it doesn’t appear to offer any relief at all,” he said.
But Hobbs agreed with Mack that the idea is worth looking into for the future. Gaming officials, however, are concerned most of the lottery profits would simply come out of existing casino winnings.
Businessmen, including car dealers and Las Vegas petroleum distributor John Haycock, complained the proposed tax on business gross receipts would be unfair to those with large dollar volumes, but small profit margins. Supermarket executives and others testified earlier they have the same problem.
Haycock said distributing petroleum involves moving huge dollar amounts of gasoline and other products — so his company has a very large gross.
He said his profit margin was just a half-percent last year so even the proposed quarter-percent gross tax would take fully half his profit.
A recurring theme in the meeting was that competition for some of those industries comes from out-of-state companies, which pay nothing in Nevada.
Member Mike Sloan, a casino executive, said the state should look for ways to make some of those out of state companies help pay.
The committee will spend most of next week’s meeting working out the business tax they hope will generate $250 million a year for the state.
They reaffirmed plans to double cigarette and liquor taxes, but decided against trying to index them to increase with inflation. And they decided to look at expanding business filing fees to partnerships and sole proprietorships, which are now exempt.
Also on the next agenda is a report by member Nancy Wong who is looking into how practical it would be to expand the sales tax to include some services such as labor on auto and other repairs.
The task force must present Gov. Kenny Guinn with recommendations to increase state revenues by at least $350 million a year by Nov. 15.
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