Gaming exec offers alternative to hiking taxes on profits

Circus Circus Enterprises executive Mike Sloan, chairman of the powerful Nevada Resort Association, suggested a split property tax structure that would have homeowners paying one rate and businesses paying another, higher rate if more revenue needs to be raised for the state.

That would make nongaming businesses, including big developers, share the tax burden, he said.

Casinos also would be affected by higher property taxes on businesses.

"There's no tax you can envision that we won't pay," Sloan said. "We'd just like to see someone else at the window with us."

Sloan said other businesses in Nevada are getting off too easy, especially some housing developers "who have made fortunes but didn't participate" in paying taxes.

Steve Comer, managing partner of the Arthur Anderson & Co. accounting firm in Las Vegas, also told legislators the casino industry is not as lucrative as some think.

Their testimony Friday before Assembly and Senate Judiciary committees follows Gov. Kenny Guinn's call for an analysis of Nevada's entire tax structure. But Guinn wants no new taxes this session.

The session also follows Sen. Joe Neal's introduction of a longshot bill to boost fees paid by Nevada's largest casinos from 6.25 percent to 8.25 percent of gross revenues.

The current tax level is the lowest among the 48 states that allow some form of gambling, but Sloan repeated earlier industry comments that now is not the time to increase the Nevada resorts' tax burden.

The industry notes the pressure on the industry from Indian gambling in California and a review by the National Gambling Impact Study Commission. Some fear the national group may try to recommend a new federal tax on casinos.

A recent state report showed Nevada's major resorts had combined pretax net profits of $1.13 billion in fiscal 1998, or an 8.2 percent return on gross revenues of $13.88 billion.

But Comer said the report excluded huge interest costs and other expenses that cut the net profit by 35 percent to 65 percent. When federal income taxes are figured in, the net drops to only about $300 million for all top Nevada resorts combined, he added. That's only a 2 percent return.

After the hearing, Assembly Judiciary Chairman Bernie Anderson, D-Sparks, said casinos do have problems "but there are different perceptions of what's happening."

He added that Sloan's suggestion on a split property tax roll "may not happen, in reality."

Carole Vilardo of the Nevada Taxpayers Association also questioned the proposal, saying, "When you split the tax roll and you target business, the trend is to try to split it even further.

"It sends a message that when revenue is needed, nobody wants to raise taxes that individuals pay. So you point at business," she added.

Vilardo also said Sloan's comment on big housing project developers not paying their fair share ignores the fact that many fees are collected for roads, utility connections, planning and other local government purposes.

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