Revenue from tax breaks unknown

CARSON CITY — Nevada legislators who want to repeal tax exemptions and use the money to balance the state budget might find that difficult because legislative fiscal analysts said Thursday they could not compute how much the many tax breaks yield.

"Because it is not reported to the Department of Taxation, it is difficult to determine how much it is," fiscal analyst Russell Guindon said during a joint Senate-Assembly Taxation Committee hearing.

Guindon said he would try to provide estimates on the revenue from specific sales and property tax exemptions if legislators request them.

Assembly Speaker Barbara Buckley, D-Las Vegas, has been saying for months that legislators would review all tax breaks granted by the Legislature to determine whether they are needed or whether the funds should cover school and other budget shortfalls.

But the 290-page report on tax breaks prepared by staff analysts does not give estimates for many of the exemptions — such as the effects of not levying sales taxes on gasoline, food, prescription drugs, newspapers and sales by charitable organizations.

Democratic leaders have announced that they intend to review all state budgets by the end of April and then determine whether tax increases are needed.

Gov. Jim Gibbons’ two-year, $6.17 billion budget is 9.3 percent smaller than the $6.8 billion general fund budget approved in 2007.

Senate Taxation Chairman Bob Coffin, D-Las Vegas, said he never thought it would be useful to repeal tax exemptions and use the money to plug budget holes.

Coffin said he and former Sen. Ann O’Connell, R-Las Vegas, tried in the 1990s to find the total amount of tax exemptions and could not obtain the information.

"I think the general thrust of this attempt by the Assembly to study exemptions is to ascertain their fairness," he said.

During the hearing, Assembly members Marilyn Kirkpatrick, D-North Las Vegas, and Debbie Smith, D-Sparks, questioned whether the state and local governments have benefited by tax breaks given some businesses locating in Nevada.

Without identifying the company, Kirkpatrick said an energy company was given $1.8 million in tax breaks, but it ended up hiring mostly out-of-state workers and shipped its power to California.

"We gained one worker out of it," she said.

That company was identified as El Dorado Energy in the tax report. The company didn’t return phone calls seeking comment.

Smith said companies have received tax breaks in the Reno area but have refused to provide the state information on how the state has benefited, citing that would be proprietary information.

Kirkpatrick said the study was commissioned two years ago at a time when the state was not in a recession and information about the total amount of tax breaks was not essential.

Contact Capital Bureau Chief Ed Vogel at or 775-687-3901.

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