(Randi Thompson) – After a four-hour hearing on the tax bill (AB464) in Ways and Means/Senate Revenue, I’m guessing many of our voices blended together, so I wanted to recap some of the key issues for the National Federation of Independent Business and urge you to oppose the commerce tax:
We have a broad base business tax now in the MBT, and we urge you to remove the current exemption to truly make it broad. Small businesses wants to pay their fair share.
If you want a broad base business tax, stop exempting businesses from taxes.
In the original version of 464, that exemption is reduced to $50,000 a quarter At the current rate of 1.17%, that exemption saves a small business about $2340 a year. (The current exemption of $85,000 saves about $4000 a year.) We would gladly pay that tax instead of seeing a commerce/margins tax implemented.
Small business isn’t buying that the legislature is looking out for them just because of the payroll tax exemption, especially when they see the margins tax coming back after they voted overwhelmingly against it.
Broadening the payroll tax can be implemented immediately, likely raise more revenue than the commerce tax, and won’t require the hiring of 23 new state employees.
If the economic development policy of this state is to diversify our economy and attract non-gaming businesses, you should not enact a new tax that only applies to non-gaming businesses.
Many business have said they will likely leave Nevada, or chose to locate to another state, if a margins/commerce tax is implemented.
No business owners have said they will leave the state if you expand the payroll tax.
Business needs predictability, but the commerce tax with it’s variety of tax rates that can be adjusted every legislative session is far from predictable.
The variety of tax rates in the commerce tax will likely be challenged in the courts as violating the constitution that requires “uniform and equal rate of assessment and taxation…” (At least the margins tax was 2% for every business!)
Big employers like hospitals and casinos are concerned about the pay roll tax, so why not consider a sliding tax rate that the bigger your payroll, the lower your rate (which I know runs counter to the constitutional argument above, but i doubt anyone will sure over that one!)
Small business created 15,168 jobs in 2012, without any tax abatements or incentives.
Small business owners are not happy that part of the tax increase you are considering on them is to fill a $150 million hole caused by tax incentives to companies like Tesla that will take 10 years to create 20,000 direct and indirect jobs.
We kindly ask you to not make it harder to open or grow a business in Nevada by increasing taxes on business again, as was done in 2003, 2009, 2011 and 2013.
Ms. Thompson is Nevada State Director of the National Federation of Independent Business (NFIB), an organization of 350,000 small and independent business owners united by one clear mission of promoting and protecting the right to own, operate and grow business. She can be reached through email at Randi@randithompson.com.