Do you live in Nevada? If so, you should feel relieved by the prospect of a new 836 million dollar tax increase. This is because it could have been a 1.2 billion dollar tax increase, according to some Nevada legislators.
The 2003 session of the Nevada legislature finally ended last week, after the meanest and most contentious session in recent memory. Nevada enacted the largest one time tax increase in state tax history, after a fierce war of words, a 15 member holdout by a group of Republican assemblypersons, a court battle, and three special sessions.
Nevada has long been a state that features no corporate business tax. That may not be the case for much longer, as the original proposal in the legislature would have imposed a gross receipts tax on businesses. This was shot down in favor of a payroll tax of 7/10ths of one percent on all businesses except banks which have the privilege of paying 2%. Additional liquor and cigarette taxes were imposed as well as a new tax on live entertainment.
Throughout this process, Governor Kenny Guinn was alternately portrayed as a blessed saint and savior of the public school system with its urgent need for funding, or as Lucifer, King of the Taxationally Damned. Mr. Guinn does seem have an extraordinary gift for the sticking his finger in the eye of the anti-tax crowd. Mr Guinn said of his massive, record tax increase last Tuesday, "It's not complete, but it's a great start for us."
Political savagery aside, the fact remains that Nevada has an urgent shortfall in its budget caused by the failure of its revenues to keep pace with its expenditures, the chief exhibit of which is the fact that the new budget features a 30.5% increase for 2003-2005.
The reason why the expenditures have risen is the real subject of debate, with the pro-tax crowd asserting that these expenditures are necessary to have even a faint hope of keeping the Nevada citizenry educated and competitive in the workforce, and those on the pro-business side citing out of control spending without the discipline of fiscal restraint.
Regardless, it appears to many that the budget crisis is not over by any means and that the structural budget problems are going to be increasingly difficult to overcome without resorting to some form of business taxation.
If you are thinking about a move to Nevada, be cautious and do so with an eye to the long term tax picture that seems to be emerging.
kiss your tax haven good bye.
The 2003 session of the Nevada legislature finally ended last week, after the meanest and most contentious session in recent memory. Nevada enacted the largest one time tax increase in state tax history, after a fierce war of words, a 15 member holdout by a group of Republican assemblypersons, a court battle, and three special sessions.
Nevada has long been a state that features no corporate business tax. That may not be the case for much longer, as the original proposal in the legislature would have imposed a gross receipts tax on businesses. This was shot down in favor of a payroll tax of 7/10ths of one percent on all businesses except banks which have the privilege of paying 2%. Additional liquor and cigarette taxes were imposed as well as a new tax on live entertainment.
Throughout this process, Governor Kenny Guinn was alternately portrayed as a blessed saint and savior of the public school system with its urgent need for funding, or as Lucifer, King of the Taxationally Damned. Mr. Guinn does seem have an extraordinary gift for the sticking his finger in the eye of the anti-tax crowd. Mr Guinn said of his massive, record tax increase last Tuesday, "It's not complete, but it's a great start for us."
Political savagery aside, the fact remains that Nevada has an urgent shortfall in its budget caused by the failure of its revenues to keep pace with its expenditures, the chief exhibit of which is the fact that the new budget features a 30.5% increase for 2003-2005.
The reason why the expenditures have risen is the real subject of debate, with the pro-tax crowd asserting that these expenditures are necessary to have even a faint hope of keeping the Nevada citizenry educated and competitive in the workforce, and those on the pro-business side citing out of control spending without the discipline of fiscal restraint.
Regardless, it appears to many that the budget crisis is not over by any means and that the structural budget problems are going to be increasingly difficult to overcome without resorting to some form of business taxation.
If you are thinking about a move to Nevada, be cautious and do so with an eye to the long term tax picture that seems to be emerging.
kiss your tax haven good bye.