Senate committee approves “sunset” tax bill

CARSON CITY — A measure making taxes that were supposed to expire four years ago permanent and increasing cigarette levies by $1 a pack was approved by a Senate committee Thursday on a party-line vote.

Senate Bill 483, the so-called “sunset” bill, includes an array of taxes enacted in 2009 that were supposed to be temporary fixes as Nevada’s economy plummeted during the recession. But those levies, including higher payroll taxes and sales taxes, have twice been extended, and Sandoval wants to make them permanent to help fund his $7.4 billion budget.

The bill now heads to a vote by the full Senate.

Democrats on the Senate Revenue Committee who voted against the bill said they could not yet support the bill and oppose other provisions such as sweeping transportation funds to balance the budget.

“I just think it’s bad timing at this juncture,” said Senate Minority Leader Aaron Ford, D-Las Vegas. He said the bill and tax discussion “needs more work.”

State Sen. Pat Spearman agreed.

“I’m not committed to doing just something. I’m committed to doing the right thing,” she said, adding that she was waiting for “a little more information.”

That brought a terse response from state Sen. Ben Kieckhefer, R-Reno, who is chairman of the Senate Finance Committee.

“What other information is necessary at this time?” Kieckhefer asked. Besides the increased cigarette tax, all the other measures of the bill are the same ones lawmakers passed in recent years.

“I think if we want to fund this budget we have to pass this bill,” he said.

SB483 was estimated to raise about $897 million over the biennium.

In its original form it increased the tax on a pack of cigarettes by 40 cents to $1.20. An amendment pushed by Senate Majority Leader Michael Roberson, R-Henderson, raised that by another 60 cents to $1, bringing the total state tax to $1.80.

The added levy is projected to bring in nearly $350 million in new revenue to pad state coffers.

Upping the cigarette tax was proposed after the Economic Forum on Friday said Nevada can expect $6.15 billion in revenue under the existing tax structure, after accounting for tax abatements granted to companies moving to or expanding in Nevada.

Besides the sunset bill, Sandoval wants to overhaul state business license fees from a flat $200 a year to a graduated scale based on industry type and gross revenues.

The business fee schedule set out in Senate Bill 252 would range from $400 to up to $4 million annually. That bill, projected to raise about $250 million annually, passed the Senate and is now in the Assembly.

But the Assembly also has other tax ideas pending. Legislators face a June 1 deadline to approve a tax package and budget or face a special session.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb.