If NV Legislature extends business tax, Republicans vow fight in court
CARSON CITY, Nev. — Senate Minority Leader James Settelmeyer, R-Gardnerville, said Thursday if Democrats try to extend the Modified Business Tax sunset and other taxes using a simple majority vote, the issue will end up in court.
He said Nevada’s constitution requires a two-thirds majority to pass “anything that increases revenue in any form.” He said that has been the ruling on sunsets in the past as well as new or increased taxes.
Settelmeyer said two-thirds is clearly required to extend the MBT rate currently scheduled to drop back down effective July 1. And, without at least one Republican, the Democratic majority is short of that mark.
Democrats have said they have an opinion from the Legislative Counsel Bureau’s Legal Division saying two-thirds isn’t necessary to extend an existing tax rate, only to enact a new or higher tax rate.
Settelmeyer said Democrats won’t get a single Republican to vote for the extension.
Nevada voters, he said made their intent clear when they added the two-thirds requirement to the state constitution.
Extending the MBT rate would generate more than $100 million over the biennium. Settelmeyer said the plan to extend the DMV technology fee set to sunset in 2021 also runs afoul of the two-thirds requirement. That fee, however, only generates about $7 million.
He said Democrats have made it clear they’ll do it on a simple majority vote.
“If they do that, we’ll end up in court,” said Settelmeyer.
He said he hasn’t talked with Gov. Steve Sisolak about the plan and about other parts of the recommended budget.
“I’ve talked to Joyce (Woodhouse) and Jason (Frierson) but I haven’t been invited over there,” he said motioning toward the Capitol.
Democrats have been scouring budgets and bills in the money committees looking for uncommitted cash in order to fund the $100 million needed to give teachers the 3 percent raises Sisolak promised during his campaign.
They have been doing so ever since the Economic Forum on May 1 added just $42.8 million to the total General Fund revenue they can spend this legislative session. The total General Fund available to the governor and lawmakers for the coming biennium is $8.85 billion.
Transient Occupancy Tax collection from April to June totalled $3.8 million, up 15% from the same period last year, an increase of $519,000. Tax collection from January through March was up 12% from that period last year, a $773,000 increase, totalling $6.8 million.