The Nevada Resort Association on Friday filed a complaint seeking to throw out two initiative petitions that would more than triple the tax rate paid by Nevada's largest casinos.
Both seek to dramatically increase the gross revenue tax major casinos pay and one of them also would eliminate property taxes in Nevada altogether, replacing them with tax money from casino profits.
The challenge was filed as a single complaint, asking both be barred from the November ballot because they violate the law requiring initiative petitions to deal with just one subject and because the descriptions of effect are "false and materially misleading."
The complaint also makes the argument that the initiatives propose a revision of the Nevada Constitution rather than an amendment, which it says is not permitted through the initiative process.
Along with the complaint, the association filed a petition for declaratory relief, asking the court to rule the initiatives "invalid and incompetent for consideration" and toss them out.
The petitions would raise the Nevada gaming tax rate for casinos earning more than $1 million a month gross - currently 6.75 percent - to the average of the maximum tax levied in other states where casinos are allowed. That would be about 22 percent - more than three times the current rate.
The tax rate would be adjusted each year to account for any changes in the rates charged by other states.
The complaint says the initiatives actually propose a wholesale revision to the Nevada Constitution, eliminating provisions that give control over taxation to the Legislature and voters, instead letting other states decide Nevada's gaming tax rate.
"This constitutes taxation without representation," the complaint says.
It says the initiatives also take authority over education and other funding away from lawmakers and give that power to the state treasurer, which would "encroach on the Legislature's sole and exclusive discretion to set state funding for public education in Nevada."
The complaint charges that both initiatives violate the requirement subjects within an initiative be closely and functionally germane to each other, not a collection of different subjects under one ballot question.
It says the petition, which would raise gaming taxes and eliminate property taxes all at once clearly violates that statute. The initiative without the property tax element, it says, contains at least seven different subjects including setting funding for road and highway construction, making direct payments to teachers, delegating tax authority to the treasurer, funding Nevada courts and promoting alternative energy and water resources.
The complaint argues much of what the two initiatives would do is misstated or omitted from the descriptions of effect designed to give voters a synopsis of any ballot question's impact and purpose.
Arguments are similar to those the resort association made in its challenge of the teachers' union initiative petition to raise gaming taxes. That initiative seeks only a 3 percent increase in the rate casinos pay the state to 9.75 percent. A hearing on that petition is scheduled for later this month before retired Supreme Court Justice Miriam Shearing, sitting as a senior judge in Carson District Court.
• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.