2009 Legislative Blog

The Assembly and Senate Tax Committees are meeting in a joint session this afternoon to receive a report on the various tax abatements and exemptions that exist in Nevada state law. You can find a copy of the 294-page report HERE.

Assemblywomen Debbie Smith and Marilyn Kirkpatrick have been heavily involved in this issue over the interim. As the Legislature looks to plug a very large budget hole, every effort is being made to find dollars wherever possible.

The Chamber’s Agenda for Economic Vitality in Nevada states our support for “legislative review of all sales and other tax exemptions, abatements, and exclusions.” We want to ensure that all exemptions and abatements are fair, transparent, and fulfill their intended purpose.

The major issues that have cropped up recently are the STAR Bond districts that have been created in Washoe County. STAR Bond projects such as Cabela’s and Legends must generate a majority of their sales to out-of-state tourists.

Projects that are approved under the STAR Bond process are able to use 75% of the sales tax they generate for 15 years to pay back the bonds used to build the project.

One argument is that these various tax exemptions take needed money away from the school districts and other local governments.

The other side of that coin is that if properties like Cabela’s or Legends are exempted from 75% of the sales tax they generate, there is still the other 25% that did not exist before.

In other words, 25% of something is better than 100% of nothing. Neither of the properties mentioned above generated any sales tax prior to being built.

Assemblywoman Debbie Smith has concerns with any tax money being diverted away from our school districts.

The Chamber supports the use of STAR Bonds to attract tourist-oriented businesses. We do not oppose efforts to review and tighten up the process if necessary.