Debate over proposed margins tax takes shape

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Debate over proposed margins tax takes shape

In the lead up to this November's Election, businesses across Nevada are launching their offensive against The Education Initiative, also known as the business margins tax.

The ballot question could raise about 800 million dollars annually for education. It would do that by levying a 2 percent tax on businesses with revenues of more than 1 million dollars a year.

At this month's economic forum hosted by the Reno/Sparks Chamber of Commerce, Governor Brian Sandoval reiterated his stance on the issue.

"I think it would be very bad for our state and be very bad in our attempts to attract new businesses to Nevada."

That's the rallying cry for many in the business community, who say the tax is poorly designed because it looks at total revenue, not just profits.

Some of the state's most powerful businesses and lobbying groups have launched a coalition to fight the tax; those include the Retail Association of Nevada, the Nevada Mining Association, the Nevada Resort Association and others. They plan to grow the coalition and bring in small businesses from across the state.

Karen Griffin is their spokesperson.

"It would give Nevada one of the highest business tax burdens in the country, higher than California. We're talking on average an equivalent of about 15 percent corporate income tax rate. California's income tax rate is just 8.8 percent for businesses."

Griffin says thousands of jobs would be lost and it would deter small businesses, which are just climbing out of the Recession, from expanding. She adds that there's no guarantee the money will be spent on education, even if it does pass. The state's room tax is an example, she says. It was supposed to go to education, but the Legislature has continually earmarked it for other purposes.

"We will absolutely make sure that every legislator will know what the impact of their diverting any kind of funds would have on public education, and they would have to do so in a public forum."

That's Ruben Murillo who is the president of the Nevada State Education Association, which is pushing for the tax.

He says the tax wouldn't impact 85 percent of businesses. Those in the top fifteen percent can afford to support education, he says, citing the millions of dollars cut in education funding in recent years..

"At what point is there going to be a serious discussion about investing in public education? The Legislature has had their opportunities over the past several years. Numerous studies have been conducted. What's their plan?"

Opponents of the tax say that, if passed, it's likely they'll take their arguments to court.