Nevada business license fee collections in legislative limbo

CARSON CITY -- Secretary of State Ross Miller won't try to impose the state's $200 annual business license fees on 60,000 nonpaying businesses until he gets direction from legislators or the courts.

Miller was disappointed Wednesday when members of the Legislative Commission deferred action on his proposed regulation that would have allowed his office to collect the fees from many limited liability corporations and other businesses that contend they are exempt.

A state law frees home-based businesses with an annual income of less than $27,000 from the $200 fee. But Miller said the state is losing more than
$10 million a year because bowling alleys, nail salons and many LLCs are claiming the exemption though he suspects they earn more than $27,000 and don't work at home.

"I don't think people mowing lawns or selling Tupperware are forming LLCs," said Miller in an interview. "We aren't taking anything away from them."

The regulation he wanted would limit the exemption to "natural persons," not companies, who sign statements that they do not make $27,000 a year.

But state Sen. Michael Roberson, R-Las Vegas, challenged the right of Miller to try to pass a regulation that contains language similar to a bill that the secretary of state failed to pass through the Legislature last year.

"I don't think you have the authority to do it," added Roberson, arguing that the commission could not approve a regulation contrary to a state law.

Roberson argued that the LLCs "may make no money at all" and that it is important not to hit them with a fee at a time when the economy is struggling.

Miller has been trying to get legislative interim committees to enact his regulation proposal, but it won't work because legislators realize he is trying to circumvent the law, said Roberson on Thursday.

But Miller argued in the hearing that his staff did a limited study and found
73 percent of the companies claiming the exemption should have paid the $200.

He said he lacks the investigative staff to chase companies that are evading the tax .

"The honor system doesn't work," Miller said. "We are trying to level the playing field. What is happening is not fair to people who are paying the $200 fee regularly."

Matt Taylor, president of the Nevada Resident Agents Association, said Thursday that the secretary of state cannot pass a regulation prohibiting the exemption to qualifying LLCs without first changing state law. The Legislature does not meet until next year.