Democratic Sen. Pat Spearman is set to present a tax plan Tuesday that she said gives one more route toward the goal of raising Nevada education funding by several hundred million dollars each year.
Spearman’s bill, SB378, joins Gov. Brian Sandoval’s proposal and a plan from Assembly Republican leaders, all of which aim to help raise about $7.3 billion in state revenue over the next two years. All three parties with a tax bill have shied away from publicly criticizing the other proposals, saying they simply want to promote a robust discussion.
“Everybody who has a plan wants to get to that place where we fund education and provide essential services,” Spearman said. “I’m hoping people won’t reduce this to partisan (politics).”
Spearman’s bill would impose a 0.465 percent tax on business gross receipts that exceed $25,000 in a quarter. While gross receipts plans have failed in the past, Spearman said the rate is far lower than historic versions.
Her bill would also repeal the modified business tax, which is levied on gross wages but acts as a disincentive for adding new employees, she said.
“I don’t think we should penalize people for hiring folks,” Spearman said. “By eliminating it, we also eliminate the paradigm of winners and losers.”
Her bill also calls for a flat $200-per-year business license fee, except for companies that are incorporated in Nevada but don’t conduct trade in the state. Those businesses would pay $400.
“It provides everyone that has the privilege of doing business in Nevada an opportunity to invest in Nevada,” she said.
The plan differs from Sandoval’s, which would leave the modified business tax alone but restructure the state’s flat business license fee into a tiered system with rates ranging from $400 to $4 million annually. Sandoval said his bill, SB252, would spread the tax burden more evenly across the state’s estimated 330,000 business entities.
Assembly Republican leadership introduced a proposal that takes the opposite tack of Spearman’s bill, raising the rate of the modified business tax and raising the business license fee slightly. Proponents say that while the modified business tax only applies to about 4 percent of businesses, it’s among the most stable and predictable options on the table.
“Our intention with this bill is not to be a competing measure, but just to show different paths to the same end result,” said Republican Assembly Majority Leader Paul Anderson. “It’s just simply a starting point to continue the discussion.”
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