Nevada businesses are being asked to estimate the cost of the proposed net profit tax in a survey being conducted by the Nevada Taxpayers Association.
The survey asks business operators to find their federal income tax returns and fill in up to 20 blanks to estimate how much the tax would cost their business.
Individual information on the survey will be kept confidential, but the association will release statistical summaries when sufficient surveys are returned, association President Carole Vilardo said.
"It is very complicated to have to pull all the information from the federal tax returns," Vilardo said. "So if anyone is interested enough to see what the impact will be on them, they'll have to go through their last filing.
"It's not like you could just take one number from the federal form and apply the proposed tax rate to it. There are a number of add-ons, exclusions and adjustments."
The Nevada State Education Association is gathering signatures for a ballot initiative to impose a net profits tax on Nevada businesses, with the proceeds earmarked for public education, grades kindergarten through 12. The 4-percent tax would be imposed on all businesses with net profits exceeding $50,000, an exemption the association's radio ads say would spare most rural businesses.
If adopted as proposed, the tax would raise an estimated $250 million the first year and would require the state spend at least 50 percent of its budget on public education. Grades kindergarten through 12 now receive about 40 percent of Nevada's budget.
The taxpayers association is enlisting other organizations to help distribute its surveys so information can be compiled from a broader range of businesses than just the association's own membership, Vilardo said.
She said the Nevada Manufacturers Association and local chambers of commerce across Nevada are also sending the survey to their members.
By the end of next week, she said, people will be able to download the survey from the association's Web site, http://www.nevadataxpayers.org, and e-mail or fax the completed forms in.
"When we get enough results in, we'll start releasing compiled results. Eventually, we'll have enough so we can break them down by business type and by county, so people will be able to see just what this tax would cost them," Vilardo said.
Vilardo said the association has completed an initial analysis of the proposed initiative as filed by the education association. The analysis and several questions raised by it are also available on the Web site under Tax Topics 3, Vilardo said.
"The initiative is complicated and difficult to understand and we've had to make some assumptions about it because of inconsistencies," Vilardo said.
"At more than 20 pages, this isn't something people are going to stop to read while carrying an armload of groceries when a petition carrier approaches," she said. "Even if they take the time to read it, it takes a couple of readings because the initiative does not track the same issues sequentially through its sections - it jumps around quite a bit."
The full text of the initiative is available on the education association's Web site, http://www.nsea-nv.org. That site also includes an analysis of the impact of the initiative in a study called "Taxation & Business Climate: The Impact of a Net Profits Tax on Nevada," by Carl Rist and Matt Hull of the Corporation for Enterprise Development.
The taxpayers association will publish its evaluation of that study, Vilardo said. The taxpayers association's Web site also contains a promise to provide point by point responses to the education association's publicity campaign.
On the Net:
Nevada Taxpayers Association:
http://www.nevadataxpayers.org
Nevada State Education Association:
http://www.nsea-nv.org