CARSON CITY — Three Southern Nevada Democratic state senators introduced a bill Tuesday that would abolish Nevada’s modified business tax for non-financial institutions and impose a new fee based on gross receipts over $25,000.
Senate Bill 378, sponsored by state Sens. Pat Spearman, David Parks and Mo Denis, was introduced on the Senate floor a day before Gov. Brian Sandoval planned to detail his business license fee proposal before a joint hearing of the Senate Revenue and Assembly Taxation committees.
Spearman, of North Las Vegas, said during a hearing earlier this month that she would propose a measure to abolish the state’s modified business tax, which is assessed on payroll.
“I don’t think we should be punishing people for hiring Nevadans,” Spearman said.
SB378 would repeal the tax on general businesses, but subject them to a new “supplemental fee” to be paid quarterly. The amount would be $50 plus 0.46 percent of gross receipts that exceed $25,000 per quarter or $100,000 annually.
Financial institutions would still be subject to the payroll tax at a 2 percent rate, and mining, which currently pays the tax at 1.17 percent, would be assessed at the higher percentage. The bill also seeks to strip the mining industry of deductions for employee health care costs when calculating net proceeds taxes on minerals.
The measure would retain a $200 annual business license fee for most businesses, but double it for businesses that do not perform a service or engage in trade for profit.
It wasn’t immediately known how much revenue SB378 would generate for state coffers, though Spearman said her propsal “covers” the governor’s recommendations and would ensure a steady, fair revenue stream.
She said legislators have a responsibility to consider all alternative revenue plans.
“I think my plan is a different plan,” she said, adding she hopes for a hearing next week.
Sandoval’s tax plan, Senate Bill 252, would overhaul the entire business license fee schedule and replace it with a tiered system based on industry categories and gross receipts. Under the governor’s plan, businesses would pay from $400 annually up to $4 million, though no business currently meets the threshold to pay the highest amount.
The governor’s office has said his plan would raise an estimated $250 million annually to fund his education priorities. It’s part of Sandoval’s $7.3 billion general fund budget that includes $1.1 billion in new and extended taxes.
The modified business tax on general businesses generates about $365 million annually, revenue that is included in the governor’s budget proposal.
Sandoval will testify about his bill Wednesday, and the entire Senate will meet as a committee of the whole on Thursday night to discuss the proposal.
Contact Sandra Chereb at email@example.com or 775-687-3901. Find her on Twitter: @SandraChereb.