Friday, May 16, 2003 | 11:49 a.m.
CARSON CITY -- A Senate panel moved a part of the tax debate into the open Thursday by approving a hodgepodge plan to raise more than $700 million in new tax revenue even as several lawmakers are working in private on a broad-based business tax.
Senate Taxation Committee Chairman Mike McGinness, R-Fallon, unveiled a proposal to bring in $883.3 million in new revenue over the next two fiscal years.
And during an afternoon work session, the Republican-controlled committee approved about $730 million in new taxes, but it included a service tax which Gov. Kenny Guinn reiterated at a rally Thursday he would veto.
"I think we need to get this process going," McGinness told his committee in a hearing room packed with business and gaming lobbyists.
Legislative lawyers have assured lawmakers they will be able to turn a tax bill out in 72 hours by working round the clock.
Starting the unwieldy mechanism to create a budget and taxation plan by this weekend is seen as critical for the Legislature to meet its adjournment date of June 2. Otherwise, a special session will be required.
But the movement of different taxes and ideas from the committee is only the first public step in the process, and the plan is sure to be amended.
A source familiar with the private tax talks said the bulk of the emphasis by legislative leadership is still on some form of the gross receipts tax. That has been the most controversial of the new tax options since its proposal last year by the Nevada Task Force on Tax Policy.
Lawmakers are discussing changing the name of the tax and are also discussing a variety of options for the tax, including exclusions, multiple rates, credits for health care benefits and a capping mechanism, the source said.
Exclusions could be used to remove a specific industry, for example -- grocery stores -- from the tax altogether.
Guinn has proposed the gross receipts at one-quarter of 1 percent on all business receipts over $450,000. Applying different rates to different industries could be a way to alleviate concerns from other industries.
Credits against the tax would allow a company to get a tax credit if, for example, it provided health benefits.
A capping mechanism would be applied similar to the federal alternative minimum tax. A business would either pay the .25 percent, or no more than a certain percentage of its gross profit.
In addition to the possible changes to the gross receipts, lawmakers are also considering various forms of a real property transfer tax and some type of tiered gaming tax.
During the Senate committee hearing Thursday, Sen. Joe Neal, D-North Las Vegas, proposed creating several tiers of taxation.
Currently companies with more than $134,000 in gross each month pay 6.25 percent. The gaming industry has said it is willing to pay another .25 percent on all tiers, for a total of 6.50 percent on the highest tier.
The Senate panel approved a half-percent increase in the tax rate for all revenue over $1 million a month, for a total rate of 6.75 percent. At that rate the tax would raise 35.1 million in 2004 and $39.8 million in 2005.
Neal suggested that all gaming companies grossing more than $5 million a month should pay 8 percent and all companies grossing more than $10 million a month should pay 10 percent.
"Something has to happen on this," Neal said. "I don't think the people will let us get away with it this time."
His motion died for lack of a second.
Some of the previously private proposals entered the sunlight Thursday, including a plan Townsend brought to apply a blanket $70,000 exemption to all property considered for a property tax increase.
The plan, which was proposed in theory earlier in the session by Speaker Richard Perkins, D-Henderson, would mean a resident with a home valued at $200,000 or less would pay nothing.
A 33-cent increase would be instituted on all other property. Thus a $300,000 home with an assessed value of $105,000 would end up with a taxable assessed value of $35,000 and would end up paying $115.
The committee's plan includes reducing some of the collection allowances paid to those who submit taxes to the state.
In addition to Townsend's property tax hike and the gaming increase, the plan included a proposal by resident agents to raise corporate filing fees; a 35-cent per pack cigarette tax in each year; a 100 percent increase in the liquor tax; a 33 percent increase in the slot route tax and a real estate transfer tax.
The Senate panel approved a real estate transfer tax of $2.25 per every $500 of value over $200,000.
The service tax approved was at a rate of 1 percent on all services except: new residential structures; new highways and streets; new government facilities; real estate; funeral services and crematories; health care; day care and residential care.
The tax, which would be implemented Jan. 1, 2005, would raise $113.9 million in six months.
Guinn said at a rally Thursday the only way he could sign a service tax is if it did not impact the average citizen.
Although Guinn said he preferred that the Legislature approve a budget and tax plan by June 2, he is preparing options for a special session.
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