Las Vegas Sun

November 21, 2017

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Sandoval says yes to tax-free comped meals, no to legislative committee

Gov. Brian Sandoval wrapped up his work Thursday on bills passed by the 2013 Legislature, signing six into law, including the agreement that the state could not collect sales or use tax on complimentary meals given to some players in casinos or on the free food provided to their employees.

The governor vetoed two bills: one to create a new legislative committee to investigate state agencies and the other to enhance bonding by the Nevada System of Higher Education.

There has been a running battle between the state Taxation Department and Nevada casino resorts about whether tax is due on “comp” meals for high rollers and the food provided free to their workers.

There have been split decisions in the courts on the issue. Two district courts have ruled the tax is not due on the food for workers but must be paid on the comp meals. The issue made its way to the Nevada Supreme Court.

The Nevada Tax Commission in May signed off on a $233 million settlement with the large casinos freeing them from paying the tax; in exchange, the casinos will not seek a refund in back taxes already paid.

Both sides agreed to drop their appeals to the Nevada Supreme Court., and the governor approved Assembly Bill 506 that cements the agreement into law.

Sandoval vetoed AB150, which created a special legislative committee to investigate and study state agencies during the interim. The 10-member committee would have the power to conduct investigations, issue subpoenas and depose witnesses.

Sandoval said this was duplicative of the powers of the Legislative Commission, and there are 14 standing subcommittees plus the Interim Finance Committee that allocates funds during the interim.

He said the bill “seeks to establish yet another entity dedicated to extending the powers of the Legislature into matters of which is not constitutionally authorized.”

At the request of the Nevada System of Higher Education, the governor also vetoed Senate Bill 18, which was initially supported by the system because it would increase revenue bonding authority. At the end of the session, a conference committee approved an amendment that changed the definition of Public Works, which the system said would increase the cost of construction, keep donors from contributing to the project and reduce the scope of future projects.

The governor said this late change would have impacted projects on the UNR campus, including the student achievement center, graduate and married student housing, undergraduate residence hall and Mackay Stadium.

The governor signed AB181, which prohibits an employer from conditioning the hiring of a worker based on his or her credit report. There is an exemption where a credit report is related to the job.

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