MINUTES OF THE

      SENATE COMMITTEE ON TAXATION

 

      Sixty-seventh Session

      March 16, 1993

 

 

 

The Senate Committee on Taxation was called to order by Chairman Dean A. Rhoads, at 1:35 p.m., on Tuesday, March 16, 1993, in Room 119 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

Senator Dean A. Rhoads, Chairman

Senator Ann O'Connell, Vice Chairman

Senator Randolph J. Townsend

Senator Sue Lowden

Senator Bob Coffin

Senator Raymond C. Shaffer

Senator Ernest E. Adler

 

STAFF MEMBERS PRESENT:

 

Kevin Welsh, Deputy Fiscal Analyst

Billie Brinkman, Committee Secretary

 

OTHERS PRESENT:

 

Bob Feldman, President, Auto Insurance of America

Carole Vilardo, Lobbyist, Nevada Taxpayers Association

Perry Comeaux, Executive Director, Department of Taxation, State

      of Nevada

Marty Bibb, State Director, National Federation of Independent

      Business

Harvey Whittemore, Lobbyist, Nevada Resort Association

 

Chairman Rhoads opened the hearing on Senate Bill (S.B.) 27.

 

SENATE BILL 27:   Makes various changes in provisions governing business tax.

 

Senator Coffin came forward to give a brief history and summary of S.B. 27. He stated, in part:

     

      ".......I undertook this project the very last night of the Legislative Session of 1991 when we were unable to reach a compromise with the Assembly on issues relating to bracketing and the conclusion that we all generally felt that the bill (Assembly Bill (A.B.) 303 of the Sixty-sixth Session) would be difficult to enforce and would be tough to understand, and that was because of so many brackets which created an impediment to employment.  But we failed to reach compromise, although we got the bill through......"

 

ASSEMBLY BILL 303

of the Sixty-sixth Session:   Imposes tax on privilege of conducting

                              business in Nevada and increases annual

                              fees paid by corporations.

 

Senator Coffin pointed out a "direct, unpopular tax was enacted on business and the unpopularity came from the fact that there was an inherent unfairness in the tax, perceived and real, in which some paid less than others." 

 

Senator Coffin went on to outline the important points of S.B. 27 as follows:

 

      1.  It proposes to equalize the tax on all employers by imposing a flat rate per employee on large and small businesses alike.

 

        2.  It proposes to remove the $400,000 cap on the amount of tax paid by the largest employers--mainly casinos and big mine operators.

 

      3.  All brackets will be removed so that all employers, with from one to 10,000 employees, will pay the same.

 

Senator Coffin stated there are other points including an imposition of penalties, and a provision for payment of the tax in the quarter following the quarter in which the tax has become accrued.

 

Senator Coffin pointed out the effective date (March 31, 1993) of S.B. 27 which is called for, would have to be changed.  His suggestion was to change the effective date to be within the next fiscal year.

 

Senator Coffin then went through S.B. 27 section by section.

 

Bob Feldman, President, Auto Insurance of America, testified from Las Vegas via the teleconference, in opposition to S.B. 27, saying he thought parts of the measure were unconstitutional.

 

Chairman Rhoads said he would ask legal counsel of the Legislative Counsel Bureau to investigate the legality of the measure.

 

Carole Vilardo, Lobbyist, Nevada Taxpayers Association, came forward to  comment on S.B. 27. 

 

Perry Comeaux, Executive Director, Department of Taxation, State of Nevada, came forward to comment favorably and answer questions concerning S.B. 27.  He said the calculations of the taxation department of the amount of tax this measure would generate would  support Senator Coffin's contention that the measure is approximately "revenue neutral." 

 

Mr. Comeaux indicated language should be added to S.B. 27 that would specifically authorize the taxation department to adopt regulations providing for the apportionment of this tax, under certain circumstances, concerning the temporary presence in the state of certain employees.  Chairman Rhoads asked  Mr. Comeaux to submit suggested language on that particular subject.

 

Discussion ensued.

 

Marty Bibb, State Director, National Federation of Independent Business, came forward to make general remarks on S.B. 27.  He pointed out the small business members favor either outright repeal or modification of the business tax.  Senator O'Connell inquired if the present business tax had been detrimental to small businesses.  Mr. Bibb replied some members had expressed they were currently not as positive about hiring more employees or expanding their business as they had been prior to the business tax.

 

Discussion interaction took place between Mr. Bibb and the committee members.

 

Harvey Whittemore, Lobbyist, Nevada Resort Association, came forward to remark on S.B. 27 and indicated he would have specific points to comment on at future hearings.   He said the Nevada Resort Association does "pledge its cooperation in developing an appropriate tax response in light of the issues raised."

 

Chairman Rhoads announced there would be more hearings on this tax subject.  He then adjourned the meeting at 2:44 p.m.

 

 

 

 

                                   RESPECTFULLY SUBMITTED:

 

 

 

                                                                   

                                             Billie Brinkman,

                                             Committee Secretary

 

 

 

 

 

 

 

 

 

 

APPROVED BY:

 

 

 

 

                                

Senator Dean A. Rhoads, Chairman

 

 

DATE:                            

 

??

 

 

 

 

 

 

 

Senate Committee on Taxation

March 16, 1993

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