For immediate release
LAS VEGAS — Responding to the Nevada Senate’s passage today of Senate Bill 252 to create a Gross-Receipts Business License Tax, the Nevada Policy Research Institute’s Executive Vice President Victor Joecks issued the following comments:
The voters of Nevada made clear in November that they do not want to impose a gross-receipts business tax, yet today the Senate passed a similar tax. Unlike the 17 Senators who voted in favor of SB252, Nevada voters recognized that raising taxes on businesses that are struggling or even losing money will only hurt families and parents throughout Nevada.
Nevada voters should thank Senators Gustavson, Goicoechea, Hammond and Settelmeyer for respecting the will of voters and rejecting this destructive tax.
SB252 would create a tax that charges businesses on their gross receipts, meaning even businesses running a deficit would be required to pay. This will force struggling businesses to close their doors and lay off workers. As the Tax Foundation has said, ‘There is no sensible case for gross-receipts taxation.’
Joecks urged Nevada Assembly members to reject SB252 and noted that Texas has experienced numerous problems with its own tax on gross receipts, the margin tax.
Governor Sandoval has stated he’s modeled his tax after Texas’ franchise tax, but that tax is failing in Texas. After Texas implemented a margin tax in 2007, roughly 20 percent of small businesses reported they would be forced to lay off employees, while one-third of businesses reported they’d leave jobs unfilled. This gross-receipts tax has been so bad that lawmakers in Texas are currently looking to eliminate it.
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