Wednesday, January 08, 2003
Copyright © Las Vegas Review-Journal

Gaming industry rejects claim it pays too little in taxes

CARSON CITY -- The gaming industry will pay an additional $39.5 million in business taxes per year if the Legislature approves tax proposals sought by a special state task force, an industry leader said Tuesday.

Nevada Resort Association President Bill Bible issued a report on the gaming industry's potential tax bite in response to contentions by business leaders that gaming would pay only $6 million more per year in business taxes.

"Their argument is not correct," said Bible, a former state budget director. "We will continue to be the dominate payer to the state general fund."

He contended the gaming industry, including casino-owned hotels, would pay $27.2 million of the projected $221 million in gross receipts taxes in 2004-05 and about $12.3 million of the additional $54 million in business license taxes.

The gaming industry now pays $20.5 million in business license taxes and more than $600 million in gaming taxes per year.

The Governor's Task Force on Tax Policy proposed in November that the 2003 Legislature levy a 0.25 percent gross receipts tax on all business income over $350,000 a year and increase the gaming tax, now 6.25 percent, to 6.5 percent.

Panel members also recommended increasing the business license tax, now $100 per employee per year, to $140 per employee per year.

But the task force also wants the Legislature to rebate business license taxes to companies that pay gross receipts taxes.

Since release of the task force report, some business leaders, led by Nevada Manufacturing Association Executive Director Ray Bacon, have circulated documents that allege the gaming industry would escape with little of the proposed tax increases.

Bacon contends gaming's total increase would be only $6 million a year.

"I got the numbers from an academic who I thought had done his homework," Bacon said. "Normally, I check numbers out."

Bacon declined to respond to questions on whether he thinks the gaming industry is paying its fair share of new taxes.

He predicted the Legislature would reject the gross receipts tax, a tax proposed by task force member Mike Sloan, the executive vice president of Mandalay Resort Group.

"I will be surprised if we see a nickel out of that tax during the coming biennium," Bacon said.

Sloan and the task force seek implementation of the gross receipts tax as a way to collect taxes from Wal-Mart, Starbucks, Bank of America and other businesses that pay little or no business taxes in Nevada.

He said the task force was directed by the Legislature to propose tax increases that better reflect the diversity of the Nevada economy, and the gross receipts tax does that.

Although the gaming industry receives 12 to 14 percent of the total revenue earned by all businesses in the state, Sloan said it contributes half of the revenue to the state budget.

"I would ask Ray Bacon what percentage of the revenue the business community is paying," Sloan said. "A lot of people are getting tired of this crap from the business community. Rather than paying their fair share, these people are interested in escaping from paying taxes."

In earlier interviews, Bible and Sloan said the gaming industry did not seek the recommendation to allow rebates of business license taxes to companies that would pay the gross receipts tax.

That recommendation came from Guy Hobbs, the task force chairman.

"It had nothing to do with the gaming industry," Hobbs said last week about the rebate plan. "They (business leaders) should have been spending more time at our meetings and paying attention than creating illusions now."

Hobbs said he thought businesses that employ a lot of workers have been hurt by the $100 per year employee business license tax, and he hopes the Legislature will alleviate some of their burden through a rebate plan.

Bible expects in the next few days to finish a study that shows exactly how much of the additional taxes sought by the task force will be paid by the gaming industry.

He believes about 30 percent of property taxes and half of alcoholic beverage taxes are paid by the gaming industry.

Under the task force plan, property taxes would be increased by 15 cents per $100 of assessed value, and alcohol taxes, unchanged since 1983, would be nearly doubled.

The Governor's Task Force on Tax Policy proposed $855 million in tax increases from 2003 to 2005.

Gov. Kenny Guinn, however, is expected to seek at least $1.2 billion in tax increases.