Legislative panel begins long-awaited tax hike hearing

CARSON CITY — A joint legislative committee has begun hearing the first major plan to raise taxes in order to fund the state budget for the next two years.

"The time has arrived," Assembly Taxation Chairwoman Kathy McClain, D-Las Vegas, said in kicking off the hearing this afternoon. "It's time to talk about revenue."

The committee will consider a proposal to increase the state tax on business payrolls. Currently, the Modified Business Tax of 0.63 percent on non-financial businesses is projected to bring in $500 million over the next biennium.

The proposal would reduce the tax to 0.5 percent on payrolls up to $250,000 annually and increase it to an unspecified higher amount above that level. A worksheet shows potential rates of 1 percent, 1.25 percent, 1.5 percent, 1.75 percent and 2 percent, with increases in state revenue ranging from $203 million to $789 million.

According to legislative fiscal analysts, 74 percent of Nevada businesses have total payrolls under the $250,000 threshold.

Contact reporter Molly Ball at mball@reviewjournal.com or 702-387-2919.