Friday, May 23, 2003 | 11:58 a.m.
CARSON CITY -- Democrats unveiled a $971 million tax plan Thursday, putting pressure on big business and gaming to pick up the slack for the "little guy."
The plan, which borrows on themes Democrats have pushed throughout the session, would give vehicle owners a 25 percent reduction in the tax paid when registering their vehicle.
The proposal, which would be put in place over the next two years, also removes the property tax increase sought by Gov. Kenny Guinn and the Task Force on Tax Policy, relying on the Unified Business Tax, a 7 percent franchise tax on banks, a real property transfer tax and a 10 percent live entertainment tax to pick up the slack.
"This is a fair plan, this is an equitable plan that finally gets big business to pay its fair share," Assembly Speaker Richard Perkins, D-Henderson, said in unveiling the proposal to the Assembly Taxation Committee.
While some Republicans said the plan would force a special session, Democrats responded favorably to the proposal and stressed that just five Republicans are needed to join the 23 Democrats and get the two-thirds majority needed to pass the Assembly.
Legislative leaders say they need to resolve the $230 million budget difference between the Republican-controlled Senate and the Democrat-controlled Assembly and pass tax packages out of committee by Saturday to stay on schedule for June 3 adjournment.
In the new plan, Assemblyman David Goldwater, D-Las Vegas, who had proposed a reduction in the Government Services Tax earlier in the session, brought back that idea by tacking it onto a bill that was to provide a tax levy to abate pesky grasshoppers wreaking havoc on alfalfa and other crops in rural counties.
"This does, in fact, help the little guy," Goldwater said.
The total plan includes variations of measures previously discussed, many of which have exemptions or relief for average taxpayers.
The gaming industry would pay an estimated $150 million of the $971 million total over the next two years. The $971 million does not include the $90 million in money to rebate the Government Services Tax.
The real property transfer tax would exempt the first $100,000 of any home sold. The rest of the value would be taxed on a graduated rate from 0.5 percent to 1.5 percent.
Sale of a home valued between $100,000 and $200,000 -- covering the average price of a home in Nevada -- would use the 0.5 percent rate. Sale of a home valued at more than $10 million would be taxed at 1.5 percent.
The gaming industry would pay an estimated $33 million with the Unified Business Tax, $31 million with the live entertainment tax and another $28.1 million more as a result of a 0.25 percent increase in the gross gaming tax.
The industry, like all businesses, would pay an annual business license fee of $100 per property and $140 a year per full-time-employee.
The UBT portion of the plan would be imposed with a much higher initial exemption for businesses in order to implement the tax Jan. 1.
Previously, both the gross receipts tax and the levy contained in the UBT exempted the first $450,000 of gross receipts from the tax. Under the UBT, from Jan. 1 to July 1 next year, the tax will exempt the first $2.5 million of a company's gross receipts.
State Department of Taxation Director Chuck Chinook said his department could implement the tax under those guidelines as early as January using existing desktop computers. The department's new technology is not expected to be up and running in time to implement the full tax for all businesses by January.
Assembly Taxation Chairman David Parks, D-Las Vegas, said that after 16 weeks of discussion and hearings on taxes, he was confident the plan supplies adequate revenue, protects small businesses and average taxpayers and diversifies the tax base by putting levies on big business.
"I don't want to leave here without making sure that our first-graders are in small enough classes to learn," Parks said.
He also said he didn't want to adjourn if prisoners were forced to be discharged "because we don't have the funds to keep them incarcerated."
The state is facing a $704 million deficit over the next two years.
Assembly Minority Leader Lynn Hettrick, R-Gardnerville, scoffed at the plan, citing the amount, the bank franchise tax and the UBT.
"The UBT is just the GRT with a different paint job," Hettrick said.
Anti-tax forces spread out in the Legislative Building on Thursday, handing out shirts that read: "Let's throw some more tea in the harbor," and urging Republicans to oppose any increased spending.
In the Senate Taxation Committee, where lawmakers have already approved $730 million in taxes over the next two years, the panel reacted tepidly to any new proposals.
Sen. Randolph Townsend, R-Reno, proposed the Unified Business Tax, which no committee member even made a motion to support.
There was also no appetite for reincarnation of Senate Majority Leader Bill Raggio's Senate Bill 308 -- a plan for the state to share in future local property tax growth.
Sen. Bob Coffin, D-Las Vegas, called SB308 "Count Dracula," and suggested the committee kill it and "get it off the table."
Wearing one of the tax revolt T-shirts, Sen. Ann O'Connell, R-Las Vegas, said $704 million is all the state should get.
"We have gone past the point of what is needed," O'Connell said.
O'Connell motioned to kill the UBT, which, like the gross receipts tax, has yet to have a hearing in the Senate panel. That motion failed as other lawmakers encouraged Townsend to provide more information about it during a Saturday hearing.
The UBT would give high-volume, low-profit companies an alternative to the plan Guinn proposed for a one quarter of 1 percent gross receipts tax.
Companies that have at least 75 percent of their receipts from the cost of goods sold would benefit from instead paying a 1 percent tax on their gross receipts less their cost of goods sold.
The UBT proposed in the Assembly Democrats' plan was supported with 51 pages of statistical data compiled by economist Jeremy Aguero.
Wal-Mart, for example, would pay less tax under the UBT and business license tax in Nevada than it would in all states nationwide, except for Colorado and Utah, Aguero said.
Several Assembly Republicans watched the Democrats unveil their plan just before an early evening floor session.
Ron Knecht, R-Carson City, immediately issued a press release condemning the plan and boasting that it was "dead on arrival." Others said the plan would force a special session, alleging that no deal on a total budget number and the taxes to fund it would be reached by the June 2 adjournment.
Sun reporter Cy Ryan contributed to this report.
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