CARSON CITY, Nev., March 25, 2014—Silver State small-business owners are almost unanimous in their opposition to a November ballot measure calling for a new margin tax, according to the results released today by their leading representative group.
The National Federation of Independent Business, America’s Voice of Small Business, asked its nearly 2,000 Nevada members two questions last week, and after a greater than usual response, it was acidly clear where their opinions stood.
Should the Nevada Education/Margin Tax Initiative be passed into law?
Yes – 1.8 percent
No – 95.9 percent
Undecided – 2.3 percent
Should NFIB/Nevada become involved in this issue based on the results of this ballot?
Yes – 91.2 percent
No – 2.3 percent
Undecided – 6.5 percent
“Our members have spoken, and NFIB/Nevada will throw its full support behind the coalition to Stop the Margin Tax,”
said Randi Thompson, Nevada state director for NFIB. “This complicated tax will require a state IRS and create the equivalent of an almost 15 percent state corporate income tax – nearly twice as high as the corporate income tax rate in California. That tax will kill jobs, force businesses to leave Nevada and stop businesses from relocating to Nevada.”
While supporters of the initiative have designated that the tax revenues are deposited into the account that funds education, the Legislature has final authority over the state budget.
“The Legislature could reduce existing funding to compensate for the new tax revenues, which means education funding would not be increased at all,” said Thompson. “All this tax means is that the size of government will grow by hundreds of millions of dollars.”
Background: The 2014 Education/Margin Tax Initiative proposes to create a new 2-percent margin tax on business entities doing business in Nevada. The initiative exempts business with total revenue of $1 million or less. The tax liability would be based on gross revenue and allows for three ways to calculate a business’ margin. The tax is expected to raise $650 million to $800 million a year. Currently the State of Nevada provides about $1 billion annually for education, through what is called the Distributive School Account (DSA), which is about one third of the State’s budget. The funds from this new tax would be deposited directly into the DSA in the State General Fund and be used for the support of K-12 education, but the legislature could reduce existing funding to compensate for the new tax revenues, which means education funding would not be increased at all. You can read the initiative here.
For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America's economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.
National Federation of Independent Business/Nevada
140 Washington St. #150
Reno, NV 89503