Las Vegas Sun

October 21, 2017

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Lawsuit seeks to stop circulation of margins tax initiative petition

CARSON CITY – An organization supported by banks, car dealers, farmers, truckers and a Las Vegas Strip casino has filed suit to block circulation of an initiative petition to impose a 2 percent margins tax on Nevada businesses.

But a spokesman for the petition says the suit was no surprise “and we are confident they will not be successful.”

The suit by the Committee to Protect Nevada Jobs said the petition was “materially misleading” and “fails to inform the voters of the effects and consequences.”

The Nevada State Education Association, an organization of teachers, and the Nevada State AFL-CIO are behind the effort to raise more money for Nevada’s public schools.

Dan Hart, a spokesman for the education association, said the lawsuit was just another tactic to delay circulation of the petition “as much as possible.”

“We expect the court will validate our petition and we can go forward,” said Hart.

Backers of the tax initiative need to gather 72,352 signatures of registered voters to present it to the 2013 Legislature. If the Legislature rejects the initiatve, it would go on the election ballot in 2014.

Josh Hicks, attorney for Committee to Protect Nevada Jobs, said the petition mentions education once in its 26 pages and makes no provision for raising public school support “by even one penny.”

He said the petition even allowed for a decrease in classroom funding and that would be an “unpleasant surprise to those who sign it.”

According to the suit, the petition does not tell the voters the required details in the required 200 words. And, the suit contends, the petition illegally contains more than one subject.

The suit has the support of the Las Vegas Sands Corp., Las Vegas Chamber of Commerce, Retail Association of Nevada, Nevada Bankers Association, Nevada Franchised Auto Dealers Association and Nevada Trucking Association.

Supporters of the initiative say it would exempt those businesses that earn less than $1 million a year – protecting small companies. Opponents said the provisions of the tax would hit most independently owned gas stations, medical clinics, ranches and farms. And, they say, it would hurt businesses struggling to make a profit.

The 2 percent modified business tax now paid by financial institutions would temporarily be raised to 2.24 percent to support the state Taxation Department in collecting the tax.

The suit says the initiative petition is unconstitutional and invalid and it asks the First District Court in Carson City to stop the petition’s circulation.

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