Opponents of Nevada commerce tax: challenges to referendum lack merit

CARSON CITY — Defenders of a move to give voters the final say on Nevada's new commerce tax argue their petition meets legal muster and a lawsuit seeking to block it should be dismissed.

In a motion filed late Wednesday in Carson City District Court, the group called RIP Commerce Tax argued challenges to the referendum are without merit.

"The petition presents a textbook case of a referendum for approval or disapproval of a statute enacted by the legislature," it said.

A hearing on the petition is scheduled for Wednesday.

The Coalition for Nevada's Tax Future, a group of business and other interests that support the tax, claims the petition has several legal problems and supporters should be stopped from collecting signatures.

Matt Griffin and Kevin Benson, attorneys for the coalition, have argued the petition's description of effect — a 200-word explanation of what it would do if passed — is misleading and fails to give potential signers meaningful information of its purpose and consequences.

Backers of repealing the commerce tax disagree.

"The petition and its description of effect are clear, truthful and non-argumentative," supporters said in the latest filing.

Nevada Controller Ron Knecht, a leader in the repeal movement, has said he expects the measure to survive the court challenge. Supporters then would need to gather about 55,000 signatures by June 21 to qualify it for the November 2016 ballot.

The commerce tax was part of a $1.4 billion tax package sought by Gov. Brian Sandoval and passed by a two-thirds majority of the 2015 Legislature to fund the current $7.4 billion, two-year budget, including a big increase in public education funding.

Knecht has said the commerce tax portion of Senate Bill 483 would only raise about $60 million a year and could be eliminated without punching too big a hole in the state budget. The commerce tax imposes a levy on businesses with $4 million or more in annual gross revenue.

Sandoval is opposed to the petition and has called repeal efforts "a wrongheaded attack" on Nevada children and families.

A separate petition to repeal the entire tax package, not just the commerce tax portion, was filed by another group led by conservative activist Chuck Muth. A judge last month rejected the original petition in that effort, but supporters have asked a federal court to consider their case. Muth withdrew a second petition filed with the secretary of state's office earlier this month but said it may be refiled.

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