A group calling itself the RIP Commerce Tax PAC has filed a petition to repeal the new business tax contained in the tax package approved by the governor and 2015 Legislature.
Unlike the referendum petition filed by conservative blogger Chuck Muth, the petition filed with the Secretary of State Oct. 8 seeks to reverse only the commerce tax, not the more than a dozen other tax changes contained in the 2015 Legislature approved Senate Bill 483.
The group is headed by State Controller Ron Knecht and lists Las Vegas City Councilman and former Assemblyman Bob Beers as Treasurer/Secretary, former Assemblyman Ed Goedhart as vice president.
Knecht said on Monday the commerce tax is projected to generate about $120 million over the biennium, an amount he said is just 1.6 percent of the budget.
“Any family can cut 1.6 percent of their spending,” he said.
Knecht said they filed the petition without announcing it publicly for a couple of reasons.
“First we expect he (Gov. Brian Sandoval) will pull out all the stops to block this,” he said.
Knecht said second is that, “we have had people chomping at the bit since this thing passed.”
He said those people want to get out and start collecting signatures, which Knecht said is a problem until any legal challenges are settled and the court gives them the go-ahead to collect signatures since any signatures collected before that would be invalid if the court changed even a word of the petition.
“We want to keep people from jumping the gun,” Knecht said.
He said the purpose of the petition is to repeal everything in SB483 that has to do with the commerce tax. He said that includes the data collection and other provisions that essentially require Nevada businesses to file what amounts to an IRS report every year.
“We want to clean the whole thing out,” Knecht said.
The bill imposes a “commerce tax” on gross revenue of any Nevada business that exceeds $4 million with that rate set according to each entity’s business classification.
Opponents of the repeal have until Oct. 29 to file a challenge. If the petition survives the legal challenges, Knecht and his backers must gather at least 55,234 valid signatures of registered Nevada voters to put the referendum on the November 2016 ballot. At least 13,809 of those signatures must be collected in each of Nevada’s four petition districts — which are the state’s congressional districts.
Sandoval has spoken out against repealing the tax package, which he worked to usher through the Republican-backed Legislature against great odds.
He said undoing the tax will destroy a rare opportunity to modernize the state’s low-performing schools.
Muth’s petition seeks to have voters reject the entire text of SB483. Carson District Judge Todd Russell on Oct. 1 blocked the petition from collecting signatures or being put on the 2016 ballot, agreeing with opponents that it contains multiple subjects in violation of the state’s “single subject” rule and lacks an accurate Description of Effect telling voters what would happen if they pass it.
Muth is trying to keep his petition alive by asking the U.S. District Court in Las Vegas to intervene and take over the case on constitutional issues.
“Controller Ron Knecht, and others who are responsible for promoting this petition, owe it to Nevadans to explain exactly what education programs they will cut if this measure passes,” the governor said in a statement, pointing to an influx of new money the tax package is providing for literacy programs, all-day kindergarten and gifted and talented education. “Its passage will destroy a generational opportunity to finally modernize and improve an underperforming education system.”
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