Governor Sandoval introduces bill that would increase business license fees

Nevada State Legislature


By Ryan Smith, @rsmithRSJ
This story first appeared on NextReno. Republished with permission from the author.

CARSON CITY, Nev. – Calling it one of the proudest moments of his life, Gov. Brian Sandoval introduced a business license fee bill today with the goal of creating much needed revenue for Nevada schools.

Sitting in front of a joint meeting of the Senate Revenue and Assembly Taxation Committees at the Nevada Legislature, Sandoval said the state “stands at a new threshold,” one in which it will only attract new businesses if it improves its education system.

His new proposal, Senate Bill 252, would double the current business license fee from $200 per business per year to a minimum of $400 for small businesses. The fee would increase to more than $4 million for businesses generating more than $1 billion in revenue each year. Fees would be collected on a quarterly basis.

The proposed business license fee also imposes different fee rates across 29 different industries. For example, the mining industry’s adjusted fee rate is .069 percent, compared to the publishing, software and data processing industry at .276 percent.

If passed, the bill would go into effect July 1 and is estimated to generate $438 million over the next two years.

“It will do no good to bring businesses to our state if we cannot improve our education system,” Sandoval said. “We have a duty to take this challenge on now, rather than leave it for future legislators, future governors and future Nevadans.”

According to Sandoval, Nevada ranks last in the nation in high school graduation rates, though it saw a nine percent improvement between 2011 and 2013 – a rate four times the national average.

Jeremy Aguero, principal analyst at Applied Analysis, an economic, fiscal and policy research firm based in Las Vegas, presented the plan on the Governor’s behalf.

Aguero said the proposal is not the same as the margins tax, voted down during the last election. Rather, it borrows elements of the gross receipts tax, the margin tax and the current business license fee structure.

“I’ve heard Question 3 was the same thing. That simply isn’t true,” Aguero said. “This is a hybrid, learned from the history of our state and learned from what other states did right and what they said they did wrong. It’s elegant in its solution.”

Revenue from the business license fees will be placed in the state’s general fund, but Sandoval’s Deputy Chief of Staff Chris Nielsen said, “The money will be placed directly into [non-distributed school account] categoricals for education only.”

Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada, spoke in favor of the bill.

“We have more jobs than we have qualified workforce,” Kazmierski said. “Even in our best models, we don’t have the workforce to meet our needs. We have to say we are investing in our education if we want businesses to invest in our state. This is the way to posture our state for future success.”

Testimony was still being heard at the time this article was published. Discussion on SB252 will continue Thursday at the Senate Committee of the Whole at 4 p.m. We will continue to follow the story and post updates as new information comes in.

To read the whole text of SB252, click here.

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