The core group of lawmakers negotiating tax increases to pay for the nearly $7 billion budget they've already agreed to reached tentative agreement shortly after 9:15 p.m. Tuesday.
The major elements in the plan, according to Assembly Speaker Barbara Buckley, D-Las Vegas, and Senate Minority Leader Bill Raggio, R-Reno, are a 0.35 percent increase in the sales tax and a 1.17 percent increase in the Modified Business Tax.
The sales tax hike would generate just less than $271 million during the biennium. The business tax would generate about $327.4 million.
Those numbers represent a middle ground between what the two parties have been fighting for the past few days. Democrats wanted a quarter percent sales tax hike and a 1.25 percent MBT rate. Republicans wanted a half percent sales tax hike and a much lower MBT.
The business tax plan includes the tiered system proposed by Buckley, which she said actually gives a tax break to 74 percent of Nevada businesses. Those with a total payroll of less than $250,000 a year would see their current 0.63 percent rate drop to 0.5 percent. Those with a total payroll over that amount would pay the 1.17 percent tax.
The group also adopted a proposed change in the depreciation rate for the automotive registration tax, which will generate about $94 million a year.
Senators planned to hear the plan as a whole committee Tuesday night but scheduled the vote for today.
Raggio emphasized this plan is a consensus of those in the meeting and at this point doesn't represent the view of the entire Senate and Assembly.
"It is at least the consensus of this group," he said.
He said the changes to the major tax sources will sunset in two years.
Altogether, the tax changes will bring in a total of $780 million over the biennium, which Raggio said was within the total both Republicans and Democrats were willing to accept.
Buckley said earlier in the day the negotiating group was close but that "the last inch" of the compromise is always the hardest.
Lawmakers have set a deadline of Thursday for passing not only the budget but the tax plan to pay for it. Their problem is getting the package to Gov. Jim Gibbons in time to force him to either sign or veto it before June 2 " the end of the regular 120 day session. If they fail to do so, Gibbons could send them into special session without the option of raising taxes since the governor controls the special session agenda.
"The deadline we have is that, if we don't reach agreement, we have the governor's budget," Buckley said, adding that neither Democrats nor Republicans want that.
The budget itself has been decided and is being finalized by fiscal staff. It will come in, as Senate Majority Leader Steven Horsford, D-Las Vegas, said, "just shy of $7 billion."
The tax debate has centered on the balance between business taxes and the sales tax hike.