For immediate release 
Contact Victor Joecks, cell: 360-359-2656

CARSON CITY – Responding to Gov. Brian Sandoval’s release of details of his new business-license tax proposal, NPRI executive vice president Victor Joecks issued the following comments:

As part of his push for the largest tax increase in Nevada history, Gov. Sandoval is unfortunately trying to subject all Nevada businesses to a destructive new gross receipts tax. His proposal is a modified version of the margin tax that voters rejected last fall by a massive 4-to-1 margin.

The governor’s tax proposal is complex and filled with dozens of rate variations that, if passed, would be sure to send armies of lobbyists to Carson City for decades to come. Although good tax structures are simple and straightforward, this administration is seeking to saddle Nevadans with a Byzantine confusion of tax rates and hard-to-understand formulas.

Just like the tax rejected by Nevada voters last fall, Sandoval’s plan would even tax businesses that are losing money. This, along with the other taxes Sandoval wants to raise, would lead to job losses throughout Nevada and force struggling businesses to close their doors.

The Business License Tax is modeled in part on the margin tax that Texas imposed in 2007. Joecks noted that the Texas office of the National Federation of Independent Businesses found that the margin tax devastated small businesses in the Lone Star State.

The year after Texas lawmakers implemented the tax, an NFIB-Texas survey found that around 20 percent of small businesses said that they would have to lay off workers and another one-third reported they wouldn’t be filling jobs, because of the tax. The tax also forced 3 percent of small businesses to close their doors.

Joecks continued:

The problems with Sandoval’s tax-and-spend proposal also include what he’s spending the money on. Pouring more money into Nevada’s broken education system, especially into programs like full-day kindergarten and pre-K that are proven to be ineffective, would only continue the waste and won’t produce lasting student-achievement gains.

It is an important step forward for Sandoval to propose a true education reform like Opportunity Scholarships and to suggest that collective bargaining needs to be changed. Those critical reforms, however, do not cost more. They allow lawmakers to increase student achievement by spending the money we already have more effectively. That makes this destructive and complex tax entirely unnecessary.

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