The 78th Legislative Session starts on Monday, and one of the major issues is Governor Brian Sandoval's proposed modification to business license fee. Sandoval says adjusting the fee to a graduated scale will generate more than $430 million over the next two years.
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If approved, the money would go towards some of the Governor's proposed education initiatives. Today's business fees are $200 but they would double to $400 under this plan, for many small businesses.
But that fee would be much higher for other businesses based on how much money they make, which industries they're in, and what their operating costs are. Â Â Â
Mike Willden is Sandoval's Chief of Staff, and says this plan is the best alternative, saying it's broad-based, compared to the Modified Business Tax that only about one-fifth of Nevada's 330,000 companies pay.
"We believe this is a fair solution and takes into consideration, running all the adaptations that have been looked at over the last ten years," Willden said.
Many conservatives are skeptical of the plan, coming on the heels of the Margin Tax that voters shot down on a 4-to-1 scale.
"The tax, itself, was so overwhelmingly defeated that I just can't see any kind of appetite for it," says Assemblyman Jim Wheeler.
The margin tax called for a 2% tax on businesses that had more than $1 million in revenue. That's more than 12-times higher than the effective tax rate of point-16 for the proposed business license fee.
A construction company making $2-million would have paid $28,000 on the margin tax, but a fee of $1,740 or a business license fee. Â And while a health service earning $27-million would pay $378,000 for a margin tax, that number would be less than $60,000.
Willden says he believes it's the best and simplest plan. "As the governor has said, if others feel there's a better solution, we say put them on the board...Let's evaluate them and let's see what makes the best sense for Nevada and specifically for Nevada's children."
Assemblyman Wheeler says the legislature is already looking at their options and coming up with their own plans. Â "We don't want to be the 'Party of No'. We don't want to say 'no, this isn't what's happening' and as a majority, we really can't do that anymore. Now, we have to have an alternative."
The governor's plan includes an additional $882 million in to education.
Wheeler says he wants long-term solutions that include increasing parental investment programs and paying teachers on merit, rather than longevity.
