Nevada Attorney General moves to dismiss GOP business tax lawsuit
September 21, 2019
Attorney General Aaron Ford this week took up the cause of Senate Democrats trying to protect their votes to extend two taxes that were scheduled to sunset July 1.
He filed a motion in Carson District Court to dismiss the lawsuit filed by all eight Nevada Senate Republicans charging that those bills are unconstitutional because they didn’t get a two-thirds vote in the Senate.
SB551 removed the sunset from the higher Modified Business Tax to pump about $100 million into K-12 education. SB542 extended the technology fee DMV is using to pay for a new computer system for an additional two years.
Both passed the Senate on a party-line vote, 13-8 — one vote short of two-thirds.
“Because neither bill ‘creates, generates or increases’ ‘taxes, fees, assessments and rates,’ each bill is constitutional,” the motion argues, quoting from the Nevada Constitution’s “supermajority” provision.
Citing that language, the motion says, “there is no reasonable doubt that the supermajority provision is intended to apply to new taxes relative to prior years rather than continuing existing taxes at existing rates as the 2019 Legislature did.”
And the attorney general’s motion says that, if there is any ambiguity requiring interpretation, “this court should interpret the supermajority provision narrowly with the intent that it apply only to new or increased taxes, not to the continuation of existing taxes at existing rates from one year to the next.”
Ford filed the motion on behalf not only of Gov. Steve Sisolak, the Department of Taxation and DMV but Senate Majority Leader Nicole Cannizzaro, D-Las Vegas. The suit also lists Lt. Gov. Kate Marshall and Senate Secretary Claire Clift, “in their official capacity.”
Led by Senate Minority Leader James Settelmeyer, R-Minden, Senate Republicans stood together, arguing that the constitutional provision has always been interpreted as applying to extending existing taxes as well as to new or raised taxes.
He argued that SB551 wasn’t even necessary to fund K-12 education because the state’s surplus is greater than the $100 million the MBT would generate. The DMV fee, by comparison, would only generate about $7 million a year.
But Democrats argued that, in a May 8 memorandum, Legislative Counsel Brenda Erdoes cleared their simple majority vote on the two bills.