Nevada Legislature: Do as we
say, not as we do!
Here’s what’s
holding up everybody who wants to repeal the largest tax hike in Nevada history
through a ballot referendum…
According to the Nevada
Constitution…
“Each law enacted by the Legislature shall embrace but one subject, and matter, properly connected therewith, which subject shall be briefly expressed in the title.”
Now here’s how your Legislature
twists what should be a simple concept into a mutated mess.
The title of the tax
hike bill that provided for a wide variety of very different tax hikes in one
omnibus bill was: “S.B. No. 483—Revises
provisions relating to governmental financial administration.”
Brief in title, yes…but
totally misleading. No one in the
general public would read that title and come to the conclusion that it
provided for the largest tax hike in Nevada history.
Now get a load of
the legislative digest of the amendment that legislators conspired together to
combine two giga-tax hike bills into one massive tax hike bill (just scan it
quickly; don’t try reading and understanding the whole thing unless you’re
prepared for the mother of all headaches!)…
* * * * *
Legislative Counsel’s Digest:
1 [ Existing law imposes an excise tax on certain financial institutions
at a rate of 2 percent
2 of the total wages paid by the financial institution each calendar
quarter. (NRS 363A.130)
3 Sections 1 and 2 of this bill require businesses that are subject to
the tax on the net proceeds of
4 mining to pay the tax on the wages paid by the business at the same
rate as the rate paid by
5 financial institutions under existing law.]
6 Section 20 of this bill imposes an annual commerce tax on each business
entity
7 engaged in business in this State whose Nevada gross revenue in a
fiscal year exceed
8 $4,000,000 at a rate that is based on the industry in which the
business entity is
9 primarily engaged. In accordance with section 9 of this bill, the
Nevada gross revenue of
10 a business entity is determined by taking the amount of its gross
revenue, as defined in
11 section 8 of this bill, making various adjustments to that amount
under section 21 of this
12 bill, and then situsing that adjusted amount to this State pursuant to
section 22 of this
13 bill. Sections 24-49 of this bill set forth the rate of the commerce
tax for the industry in
14 which a business entity is primarily engaged. Sections 2-66 of this
bill further provide for
15 the administration, collection and enforcement of the commerce tax by
the Department
16 of Taxation in a manner similar to other state taxes. Sections 77, 79,
83, 85, 86, 89, 90,
17 93-95, 97 and 100 of this bill authorize the imposition of various
types of disciplinary
18 action against certain business entities who fail to pay the tax by
the agencies responsible
19 for their supervision and licensing. Sections 78, 80-82, 84, 87, 88,
91 and 92 of this bill
20 authorize the Department to obtain certain records and information
from certain
21 agencies to assist the Department in its administration of the tax.
Sections 96, 98, 99, 101
22 and 102 of this bill amend various provisions of existing law,
including, without
23 limitation, various provisions of the Nevada Insurance Code to
specifically provide that
24 entities regulated under that Code are required to comply with the
provisions of the
25 commerce tax.
26 Existing law imposes an excise tax on certain businesses other than
financial institutions
27 at the rate of 1.17 percent of the total wages paid by the business
each calendar quarter that
28 exceed $85,000. (NRS 363B.110) On July 1, 2015, this rate is scheduled
to change to 0.63
29 percent of the total wages paid by the business each calendar quarter.
(Chapter 476, Statutes
30 of Nevada 2011, pp. 2891, 2898, as last amended by chapter 518,
Statutes of Nevada 2013, p.
31 3427; chapter 518, Statutes of Nevada 2013, p. 3424) Existing law also
imposes an excise
32 tax on financial institutions at the rate of 2 percent of the total
wages paid by the
33 financial institution each calendar quarter. Sections [10 and 12-14]
62 and 67-70 of this
34 bill [remove this scheduled rate change and permanently provide for
the imposition of the tax
35 at the rate of 1.17 percent of the total wages paid by the business
each calendar quarter in
36 excess of $85,000.] : (1) require businesses that are subject to the
tax on the net proceeds
37 of mining to pay the payroll tax at the same rate as the rate paid by
financial institutions
38 under existing law; (2) impose the payroll tax businesses other than a
financial
39 institution or a mining business at the rate of 1.475 of the total
wages paid by the
40 business each calendar quarter that exceed $50,000; (3) authorize a
business to subtract
41 50 percent of the commerce tax paid by the business as a credit when
determining the
42 amount of the tax on the total wages paid the business which is due
from the business;
43 and (4) require a reduction in the rate of the tax on the total wages
paid by all businesses
44 if the combined revenue from the commerce tax and the tax on the total
wages by a
45 business exceed a certain amount.
46 Existing law imposes an excise tax on the purchase, possession or use
of cigarettes at the
47 rate of 80 cents per pack of 20 cigarettes. (NRS 370.165, 370.350)
Under existing law, the
48 Department of Taxation must remit 70 cents of the tax on each pack of
20 cigarettes, less the
49 costs of collecting the tax, to the State Treasurer for deposit in the
Account for the Tax on
50 Cigarettes in the State General Fund, and the remaining amount of the
tax must be deposited
51 in the Local Government Tax Distribution Account for distribution to
local governments.
52 (NRS 370.260) Sections [3-5] 71-73 of this bill increase the excise
tax on cigarettes to $1.80
53 per pack of 20 cigarettes and require the additional amount of tax to
be deposited in the
54 Account in the State General Fund. Section [16] 113 of this bill
requires a wholesale dealer
55 who purchases a revenue stamp evidencing payment of the tax before
July 1, 2015, but who
56 has not affixed that stamp to a pack of cigarettes before that date to
pay the additional tax on
57 the stamp.
Assembly Amendment No. 1039 to Senate Bill No. 483 First Reprint Page 4
58 Existing law imposes an annual fee of $200 for a state business
license. (NRS 76.100,
59 76.130) On July 1, 2015, this fee is scheduled to change to $100.
(Chapters 381 and 429,
60 Statutes of Nevada 2009, as last amended by chapter 518, Statutes of
Nevada 2013, p.
61 3426) Sections 74 and 75 of this bill increased the annual state
business license fee to
62 $500 for all corporations organized pursuant to the laws of this State
and all foreign
63 corporations transacting business in this State. Sections 74 and 75
further maintain the
64 existing $200 state business license fee for all other businesses.
65 Existing law requires each business entity organizing under the laws
of this State or
66 transacting business in this State to: (1) file with the Secretary of
State an initial list and
67 an annual list of the directors and officers of the entity or the
persons holding the
68 equivalent office; and (2) pay a fee for that filing. (NRS 78.150,
80.110, 82.193, 82.523,
69 84.110, 86.263, 86.5461, 87.510, 87.541, 87A.290, 87A.560, 88.395,
88.591, 88A.600,
70 88A.732, 89.250) Sections 75.5 and 76.1-76.8 of this bill increase by
$25 the fee for filing
71 an initial or annual list.
72 Existing law requires, until June 30, 2015, the advance payment of the
tax on the net
73 proceeds of minerals based upon the estimated net proceeds and
royalties of a mining
74 operation for the current calendar year. (Chapter 4, Statutes of
Nevada 2008, 25th Special
75 Session, p. 14, as last amended by chapter 518, Statutes of Nevada
2013, p. 3425) Section [6]
76 103 of this bill delays the expiration of this requirement for advance
payment until June 30,
77 2016, and section [11] 107 of this bill makes conforming changes to
related transitory
78 provisions governing the duties of the Department of Taxation in 2017
and the appropriation
79 and apportionment of money to counties and other local governments
during that year.
80 Existing law provides that effective January 1, 2016, in computing the
net proceeds from
81 certain mining operations conducted in this State, a person may deduct
certain amounts
82 expended for health care for employees actually engaged in mining
operations in this State.
83 (Chapter 449, Statutes of Nevada 2011, p. 2690, as amended by chapter
518, Statutes of
84 Nevada 2013, p. 3426) [Section 9] Section 106 of this bill extends to
January 1, 2017, the
85 effective date of this deduction. Section [8] 105 of this bill makes
conforming changes to
86 transitory provisions governing the computation of the proceeds from
certain mining
87 operations for calendar years 2016 and 2017 and all subsequent
calendar years.
88 Existing law requires, until June 30, 2015, an increase in the rate of
the Local School
89 Support Tax of 0.35 percent. (Chapter 395, Statutes of Nevada 2009,
pp. 2191-93, as last
90 amended by chapter 518, Statutes of Nevada 2013, p. 3426) Section [7]
104 of this bill
91 removes the expiration date of this rate thereby requiring the payment
of this rate indefinitely.
92 The State of Nevada imposes a governmental services tax for the
privilege of operating
93 any vehicle upon the public highways of this State. (NRS 371.030) The
annual amount of the
94 basic governmental services tax is 4 cents on each $1 of valuation of
the vehicle, as
95 determined by the Department of Motor Vehicles. (NRS 371.040) Existing
law sets forth
96 depreciation schedules for determining the amount of the basic
governmental services tax due
97 each year for used vehicles and establishes a minimum tax. (NRS
371.060) In 2009, the
98 amount of the basic governmental services tax due annually was
increased for used vehicles
99 by reducing the amount of depreciation allowed and increasing the
minimum tax. The revenue
100 from these increases in the basic governmental services tax were
allocated to the State General
101 Fund until June 30, 2015, and then were required to be deposited in
the State Highway Fund
102 thereafter. (Chapter 395, Statutes of Nevada 2009, p. 2188, as last
amended by chapter 518,
103 Statutes of Nevada 2013, p. 3426) [Section 7] Sections 78.1-78.9 of
this bill [extends for an
104 additional 2 years the period during which] provide that: (1) the
increases in the basic
105 governmental services tax are allocated to the State General Fund [.
Therefore,] in fiscal year
106 2015-2016; (2) in fiscal year 2016-2017, fifty percent of those
increases will be deposited
107 in the State General Fund and 50 percent of those increases will be
deposited in the State
108 Highway Fund ; and (3) the entire amount of those increases will be
deposited in the State
109 Highway Fund commencing on July 1, 2017.
110 [ Section 14.5 of this bill requires a person who, on or after
October 1, 2015, and before
111 October 1, 2016, applies for the issuance or renewal of a state
business license to include in
112 the application certain information concerning the revenue earned by
that person from the sale
113 of services used in this State.]
114 Existing law requires a court to impose a fee of $100, in addition to
any other
115 administrative assessment, penalty or fine imposed, if a person
pleads guilty, guilty but
116 mentally ill or nolo contendere to, or is found guilty of, a charge
of driving under the
Assembly Amendment No. 1039 to Senate Bill No. 483 First Reprint Page 5
117 influence of intoxicating liquor or a controlled substance that is
punishable as a
118 misdemeanor. The money collected for this fee is deposited with the
State Controller for
119 credit to a special account in the State General Fund administered by
the Office of Court
120 Administrator and money apportioned to a court from this fee must be
used by the court
121 for certain purposes related to specialty court programs. (NRS
484C.515) Under existing
122 law, this fee expires by limitation on June 30, 2015. (Chapter 373,
Statutes of Nevada
123 2013, p. 1992) Section 109 of this bill extends the expiration date
of this fee until June 30,
124 2017.
* * * * *
Again, that’s just
the DIGEST of the AMENDMENT.
The final bill as
passed by the Republican-controlled Nevada Legislature and signed by “Republican”
Gov. Brian Sandoval is actually 108 pages long!
If that monstrosity
constitutes a “single subject” then east is west and night is day.
But hold on, it gets
worse…
In an effort to make
it exceedingly more difficult for Nevada citizens to place issues on the ballot
for “the people” to vote on, the Legislature – at the behest of the gaming industry
- added a new “single subject” law to the Nevada Revised Statutes in 2005 which
reads, in part…
“Each petition for initiative or referendum must: (a) Embrace but one subject and matters necessarily connected therewith and pertaining thereto…
The same language as
the supposed constitutional limitation on legislation.
The problem is, the
courts have interpreted the “single subject” definition very liberally for the
Legislature while giving it a strict interpretation when it comes to
initiatives and referenda proposed by citizens – exactly as the gaming industry
intended.
The divergent
interpretations of almost identical rules as applied to the governing vs. the
governed sparked a lawsuit back in 2012 filed by Kermitt Waters on
behalf of Citizen Outreach and two other organizations.
In District Court,
we argued that either the liberal definition as applied to legislation should
also apply to initiatives and referenda, or the strict definition applied to
initiatives and referenda should be applied to legislation.
We could live with
it either way, but the rules should apply equally to both.
No way, said Big
Gaming.
“Measures of popular
passion or self-interest, the two dangers which were meant to be controlled by
the deliberative process of representative government, must be rigorously
restrained in the process of direct democracy,” Matt Griffin, attorney
for the Nevada Resort Association, argued in court.
Yes, yes. The great unwashed must be restrained while
politicians in the pockets of special interests are allowed to wander around
free range.
Or as former Las Vegas Review-Journal editorial
writer Vin Suprynowicz so eloquently put it…
“There are two ‘classes,’ you see, the peasants and the elected elite. Arrayed against [Waters] will be the expensive and fancy lawyers of the Nevada state Legislature, the Nevada Attorney General’s office (defending Nevada’s Secretary of State), the casino industry, the mining industry, and a plethora of other special interests anxious to see that the common citizenry is left with no ability to go to the polls and do end-runs around the state lawmakers who these potentates have bought and paid to do their bidding.”
Not surprisingly, we
lost at the District Court level and filed
an appeal with the Nevada Supreme Court.
Arguments were presented by Mr. Waters over a year ago, but the Court
has yet to rule. But the circumstances
surrounding SB483 should be considered by the Justices in this matter even if
not legally “ripe.” Here’s why…
A section of the “single
subject” law enacted by the Legislature in 2005 reads…
“2. For the purposes of paragraph (a) of subsection 1, a petition for initiative or referendum embraces but one subject and matters necessarily connected therewith and pertaining thereto, if the parts of the proposed initiative or referendum are functionally related and germane to each other in a way that provides sufficient notice of the general subject of, and of the interests likely to be affected by, the proposed initiative or referendum.” (my emphasis)
Now, it’s one thing
to argue that an initiative that has nothing whatsoever to do with proposed
legislation violates the strict interpretation of the single subject rule, or
is vulnerable to the “popular passion or self-interest” that the gaming
industry believes must be controlled and “rigorously restrained,” however…
How do you make that
“single subject” argument when the measure on the ballot is the EXACT SAME LANGUAGE
enacted by the Legislature itself?
I mean, come
on. What’s identically good for the
goose must be what’s identically good for the gander, right?
So if the
Legislature can pass a 108-page bill raising a wide variety of taxes by some
$1.4 billion, the citizens should be able to vote to repeal the entire exact
same bill, word-for-word, in a ballot referendum, right?
Not necessarily so.
In a legal opinion
forwarded to me separately this afternoon by State Controller Ron Knecht
and Assemblywoman Michele Fiore, Brenda Erdoes of the Legislative
Counsel Bureau wrote…
“Although it seems counterintuitive, I do not believe that you would be able to bring a referendum to a vote of the people that included all of the provisions of SB 483 (2015), which is the bill that added the Commerce Tax to the law. Based upon the current case law, the Supreme Court would likely find such a referendum to be in violation of NRS 295.009. That section sets forth the single subject rule for initiatives and referenda and has been much more narrowly construed by the Courts than the constitutional single subject rule (section 17 or Article 4 of the Nevada Constitution) that applies to statutes enacted by the Legislature.”
If that’s true, then
each and every separate tax hike passed by the Nevada Legislature in that one
giga-normous bill would have to qualify separately as a ballot issue.
Meaning each and
every one of the separate tax hikes we just got shoved up our collective wazoos
would have to get 55,000+ signatures to make it on the ballot.
Fortunately, Erdoes’
opinion is just that – one legal opinion, although an important one.
But with the single
subject controversy already sitting in the Nevada Supreme Court’s lap, maybe
we, the people, will finally catch a break.
In any event, now
you know why it’s taking so long for the various groups interested in possibly
pursuing a tax hike referendum of some kind to get the ball rolling. No one really knows what the rules are yet.
Cheers.
Chuck Muth
President
Citizen Outreach
We Decide Coalition
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