Legislators prods state agencies to collect more from past-due taxes

CARSON CITY -- Legislators expressed concern Friday that state agencies are not doing enough to collect back taxes owed by individuals and businesses.

Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, said agencies, particularly those that regulate businesses, should consider pulling licenses of companies that do not pay taxes.

"People are opening and closing businesses all the time," she said. "I want to be sure we are collecting (taxes) on them."

Assemblywoman Debbie Smith, D-Sparks, said state agencies should come up with a common policy on when they decide to write off debts owed them.

"If we are writing off taxes and fees owed by businesses, we should be consistent," she said.

They spoke during a meeting of the Legislative Commission, a group of 12 legislators who handle legislative business when the Legislature is not in formal session. The 2011 session begins in February.

State Taxation Director Dino DiCianno said individuals and businesses have paid $6 million in delinquent taxes since the start of a tax amnesty program in July. Using the program, under which people are not fined if they pay what they owe, legislators had hoped to raise $10 million.

DiCianno said he anticipated that goal can be reached since some businesses will wait until almost the end of the amnesty period on Sept. 30 to pay.

"It's just good business sense," he added.

But he noted that of the $6 million collected, only $2 million will go into the state general fund. The rest will go to local governments and schools.

Legislators had anticipated recovering at least $10 million when they revised the state budget during a special session in February. Initially they had hoped to collect as much as $100 million.

The move to collect more in unpaid taxes has been spawned by the anticipation that state tax revenues in 2011 will be $3 billion short.

Frank Streshley, chief of the Gaming Control Board's Tax and Licensing Division, said his agency collects about 99.9 percent of the gaming taxes that are assessed. The hammer it has is the ability to pull gaming licenses of companies that do not pay up, he said.

But DiCianno said his agency, which also collects sales and other taxes, receives about 98 percent of the taxes due.

While he considered that a good collection record, some legislators said more effort must be exerted to collect unpaid taxes.

Kirkpatrick also was not happy when Edgar Roberts, director of the Department of Motor Vehicles, mentioned that one fuel supply company owes the state $378,000.

"The public wants to know why are we not on top of this a little better," said Kirkpatrick. "I have had constituents say they pay taxes at the pump, so how could we miss this?"

Roberts said DMV has made arrangements with the unidentified firm to pay what is owed on a payment plan, instead of revoking its license. With penalties and interest, the DMV expects to collect more than $400,000 in the fuel supply case alone, counting penalties, by December.

The DMV is pursuing the collection of $4.9 million in past-due taxes, but $2.7 million of it is 15 years to 20 years old and might never be collected, Roberts said.

Streshley even said his agency intends next week to ask the Gaming Commission to write off nearly $1.7 million in tax debts because the debts have been owed more than five years and "it is extremely doubtful we can collect it."

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.