Beware of the slick packaging for a bill that will appear on the November ballot in Nevada.
Identified by its legal name of The Education Initiative but more widely know as the Margins Tax, this piece of legislation has now put a damper on Nevada’s business community.
Businesses in every corner of the state — including Churchill County — are combining people and other resources to defeat this legislation in a little more than six months.
Touted to help K-12 education in the state, this initiative, though, punishes business owners and the workforce. If passed, every business with a total gross revenue exceeding $1 million would be subject to a new 2 percent tax based on gross revenues. Unlike other businesses taxes in Nevada, this initiative does not allow a business to deduct all of its expenses. A fear is that many businesses could close their doors ... forever.
Both executive directors from the Churchill Economic Development Authority and Fallon Chamber of Commerce have been educating their members on the downfall of this legislation if passed.
CEDA’s Rachel Dahl said businesses have told her they will not consider Nevada for relocation until after the general election. According to multiple sources, existing businesses are looking to relocate if this bill passes.
While it is well known that education funding suffers in Nevada, the answer is not to make another sector suffer as well, especially when the business sector brings in new firms and jobs.
Furthermore, Dahl said the Margin Tax Initiative would give Nevada one of the five highest business tax burdens in the country, even exceeding our neighbors to the west, California. Business tax liability for affected businesses could increase by an average of 450 percent.
One Fallon firm that grosses more than $1 million in annual revenue said the initiative would siphon another $200,000 from the company. The quickest way to balance the budget is to cut jobs … something the school district is now doing to balance its budget.
The message is slick: Nevada education needs money, but the true message is not at the expense of businesses. The initiative also has pitfalls because the legislature could take money from the Distributive School Account and fund other items.
Check out information on the initiative, but more importantly, talk to businessmen and women and discover how this measure, if passed, will provide another devastating blow to Nevada’s economic recovery.
Editorials written by the LVN Editorial Board appear on Wednesdays.