Sandoval’s revised tax plan clears Assembly hurdle

By Riley Snyder, Associated Press

Published Thursday, May 28, 2015 | 8:21 p.m.

Updated Thursday, May 28, 2015 | 8:50 p.m.

CARSON CITY — Nevada Gov. Brian Sandoval's tax plan is one step closer to becoming law after clearing another legislative hurdle, but the Republican governor's historic tax expansion faces a rough road to approval in the final days of the session.

Members of the Assembly Ways and Means Committee voted to amend and pass AB464 on an 11-4 vote on Thursday. The bill now moves to the Assembly floor.

The measure raises the business license fee to $300 or $500 depending on company size, and adopts an Assembly Republican leadership proposal to raise the rate of the existing modified business tax.

The hybrid "Nevada Revenue Plan" also adopts elements of an earlier Sandoval proposal that taxes businesses on gross revenue and industry type, but would be limited to businesses that make more than $3.5 million in Nevada-based revenue each year. It's expected to haul in around $524 million over a two-year period.

Though several Republicans on the committee balked at approving an expanded tax plan, Assembly Majority Leader Paul Anderson said that 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 that 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.

Another portion of Sandoval's historic tax plan progressed Thursday after the Assembly Taxation Committee approved SB483, which makes several expiring sales and payroll tax rates permanent. The bill also raises cigarette taxes by $1 per pack and is expected to bring in around $600 million over a two-year period.

Sandoval is trying to raise or extend $1.1 billion in taxes over the next two years, mainly to support a slate of new K-12 education initiatives benefiting English language learners, students in poverty and other groups with special needs.

While his original plan, SB252, passed the Republican-controlled Senate 17-4 in April, even supporters raised concerns about the policy. Assembly Republicans developed a tax plan of their own, AB464, and other alternatives emerged.

Sandoval's staff said they incorporated the best elements of both plans and emerged this month with the hybrid "Nevada Revenue Plan."

A number of business groups, including the Las Vegas Metro Chamber of Commerce, have endorsed the plan.

Most criticism of the plan centered on the Commerce Tax, which opponents said is complicated and would lead to industries fighting each session to try to get a lower rate.