Locals discuss proposed margin tax
Dylan Woolf Harris
A proposed tax will cost Nevadan jobs and won’t necessarily help the schools its designed to fund, said opponents of the margin tax on Thursday.
The Elko Area Chamber of Commerce’s Government Affairs Committee organized a public forum to discuss the margin tax — also called “The Education Initiative” and “Question 3” — which would place a 2 percent tax on the gross revenue of businesses that generate more than $1 million in annual revenue.
Voters will decide at the ballot in November whether the tax is implemented. Until then, sides arguing for and against the bill are trying to rally supporters.
The chamber invited Manny Martinez and Jerry O’Driscoll, directors of Reno-based NV Jobs PAC — a political action committee formed for the purpose of defeating the margin tax — to share their thoughts with forum attendees, an audience of about 20 people.
O’Driscoll said profit margins for many businesses, even those grossing more than $1 million, aren’t substantial. A trucking company with a fleet of five semis, he said for example, that collects $2 million might only profit $100,000 after factoring in gas, maintenance costs, employee salaries and benefits and other miscellaneous expenses.
Apply the margin tax to the calculation, and that profit drops to $72,000.
“A seemingly small tax on the gross revenue of the business translates into a very high tax on its profits,” O’Driscoll said.
In the trucking company scenario, O’Driscoll imagined the profit is split between two owners who now bring home less money than they pay their truck drivers, and they’re forced to lay off a receptionist.
The $1 million threshold of gross sales, NV Jobs PAC representatives said, is a mark many businesses hit.
If passed, money generated from the tax will go into Nevada’s distributive school account, which is dispersed to school districts.
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