MINUTES OF THE
SENATE Committee on Taxation
Seventy-second Session
April 24, 2003
The Senate Committee on Taxation was called to order by Chairman Mike McGinness, at 1:45 p.m., on Thursday, April 24, 2003, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Mike McGinness, Chairman
Senator Dean A. Rhoads, Vice Chairman
Senator Randolph J. Townsend
Senator Ann O'Connell
Senator Sandra J. Tiffany
Senator Joseph Neal
Senator Bob Coffin
STAFF MEMBERS PRESENT:
Rick Combs, Fiscal Analyst
Ardyss Johns, Committee Secretary
OTHERS PRESENT:
Ruben R. Murillo, Jr., Vice President, Clark County Education Association
Dino DiCianno, Deputy Executive Director, Department of Taxation
Renee Parker, Chief Deputy Secretary of State, Office of the Secretary of State
Chairman McGinness:
Ruben R. Murillo of the Clark County Education Association has asked for a couple of minutes.
Ruben R. Murillo, Jr., Vice President, Clark County Education Association:
I am a special education teacher from Clark County and I sit on the board of directors for the National Education Association. I am here to present to you approximately 4000 signatures on these petitions (Exhibit C. Original is on file in the Research Library) collected during the Clark County School District’s regional meetings held at various schools across Clark County addressing proposed budget and program cuts. These signatures are also from teachers and support staff in our schools. We ask that when the time comes when all the different pieces of the taxation puzzle come together the completed puzzle be fair, equitable, and broad-based.
It was amazing to hear the comments, especially from the parents at Chaparral High School, Green Valley High School, and Ed W. Clark High School, talking about what the impact of the cuts would be to their children. We are asking you to look at the petitions. These signatures are from people who attended the meetings and who have a vested interest in public education.
Chairman McGinness:
We will open the hearing on Assembly Bill (A.B.) 530.
ASSEMBLY BILL 530 (1st Reprint): Revises provisions governing certain property taxes. (BDR 32-489)
Dino DiCianno, Deputy Executive Director, Department of Taxation:
I am in front of you here today to support A.B. 530. It is a bill requested by the Department of Taxation and relates specifically to the centrally assessed valuation of property. There are two parts to the bill. The first part is to provide for a filing date for centrally assessed public utility property valued under Nevada Revised Statutes (NRS) 361.320, subparagraph 1.
The second part is to clarify the Department of Taxation’s authority to impose penalties and interest on delinquent accounts on centrally assessed properties on the unsecured tax roll.
Specifically, to detail within the language of each section of the bill, the statute does not currently provide for a filing deadline. The department has experienced numerous delays from taxpayers who fail to file. Currently, the process is inefficient and administratively burdensome, with some taxpayers providing information only a few days before the assessments have to be presented to the Nevada Tax Commission for certification.
Currently penalties and interest are imposed on only those delinquent tax accounts for centrally assessed properties assessed under the secured tax roll. There is no provision for the imposition of penalties and interest on delinquent tax accounts for unsecured centrally assessed properties, other than private car lines, which currently exists within the statute.
This bill would provide for equal treatment of all industry types under central assessment, secured or unsecured roll, and subject all delinquent tax accounts to the imposition of penalties and interest.
The department was approached for an amendment to the bill, which it has reviewed and with which it is in agreement. If I may draw your attention to page 2 of the bill, section 1, subsection 3, line 20. We are asking to delete the last sentence of subsection 3. It states, “The State Board of Equalization shall not reduce an assessment made pursuant to this subsection.”
When this bill was originally written we tried to mirror the language on the locally assessed side. After consideration, we agree it should be removed. All centrally assessed properties have a direct appeal right to the Nevada Tax Commission. With respect to the unsecured roll, we feel due to due process, the sentence should be removed. Every company should be afforded the opportunity to present its case in front of the State Board of Equalization. We will deal with it just like any other process with respect to an appeal to that State board.
Senator Rhoads:
Explain the difference between secured and unsecured.
Mr. DiCianno:
With the secured roll, there is real property on which we could place a lien. The unsecured roll predominately deals with personal property, which can be migratory, so there is nothing on which to attach a lien. The majority of personal property, like the air carriers, goes on the unsecured roll. With respect to the electric utilities, telecommunications, the railroads, and such, those are on the secured roll.
Chairman McGinness:
How was the bill amended in the Assembly?
Mr. DiCianno:
Page 2 of the bill, section 1, subsection 2, line 15 originally stated 30 days. We had no problem with the request to change it to 45 days.
Senator Tiffany:
What financial information will be required by the tax commission? It just seemed a little broad. When you talk about the penalties, would they be for late filing of the form, or late payment of the tax?
Mr. DiCianno:
The penalties have to do with the late filing only. With respect to your first question, we utilize the financial statements. We basically do a “going concern” value on these centrally assessed companies and the information we utilize is on their balance sheets and income statements. It has always been standard practice.
Chairman McGinness:
You should have a work session document (Exhibit D). We will talk about Senate Bill (S.B.) 238 which is the Governor’s tax proposal.
SENATE BILL 238: Provides revenue in support of state budget. (BDR 32-1208)
Chairman McGinness:
We are considering the bill on a piece-by-piece basis. The first item to be considered is the business license fees. We talked about this a little last time and decided we should back up and take a look at it. I must advise the committee S.B. 298 was passed on the Senate floor. It came to the floor from the Senate Committee on Judiciary.
SENATE BILL 298: Makes various changes to provisions pertaining to business. (BDR 7-987)
Chairman McGinness:
Senate Bill 298 included fees for resident agents and when it went to the floor, Senators Neal and Coffin voted against it. It included imposing an annual fee of $50 to be paid by all businesses, including sole proprietors. In effect, we have already passed the business license fee out of the Senate. I am troubled by the inconsistency we would present by passing something different out of this committee, or putting it in S.B. 238. I think we all know we will have an opportunity to revisit it. However, it would be my recommendation to live with the business license fee as it has been passed.
Senator Tiffany:
I have been on the record for being opposed to including sole proprietors in either the fee or the tax. Further, I understand it would be very difficult to collect the taxes from all of the sole proprietors. The range is anywhere from 70,000 to 100,000. We do not even know how many. I understand this was created so we would at least have a database to be able to start tracking these individuals, a principle I am also against. I cannot vote against it, but is there anything we can do to at least create a conflicting bill so we could maybe have a conference committee to be able to do something about this?
I think we might have created a monster. If you cannot find these people, let alone tax, audit, review, or even know the number of people, it seems like a pretty silly thing to be doing. We have always talked about “sticker shock” and I think to go from zero to $50 is sticker shock.
Senator Rhoads:
I have the same problem with sole proprietorship. I think we are hurting the little guy, which is certainly not my intent.
Chairman McGinness:
I tend to agree with Senators Tiffany and Rhoads. The feeling I got from this committee the other day was that we did not want to go to the sole proprietors. However, it makes me uneasy to pass a bill out of this committee contrary to a bill we already passed. I think we will have the opportunity somewhere down the line, in a conference committee or an amendment we can offer, and be able to address this.
Senator Tiffany:
I think one of the policy questions is, Do we want to create a database of these small business owners? I do not think we have really had that discussion.
Senator Coffin:
We should have a database on those people. If they are selling anything, they have to report sales tax. They have to have a sales tax number, do they not? Are they exempt?
Mr. DiCianno:
If they are selling a product, they have to be registered with the department and would have to have a sales tax permit. They do not necessarily have to have a business license.
Chairman McGinness:
Would a sales tax permit provide the database you would need?
Mr. DiCianno:
There is only a small portion. There are certain sole proprietors who do not sell tangible personal property. Instead, they provide a service and would be subject to a business tax, but are not currently registered for sales tax.
Senator Tiffany:
I understand it can even get more complicated. Suppose a wife is selling Avon and her profit is $400 or $500, can she file with her husband? It would therefore be a joint filing rather than an independent filing.
Mr. DiCianno:
Is the husband already registered with the department?
Senator Tiffany:
Suppose he works for one of the casinos and she stays at home with her children, but sells Avon on the side. She does not make more than a few hundred dollars profit for the whole year. My understanding is she could then have her income rolled in with her husband’s.
Mr. DiCianno:
I would have to check into it. My initial reaction is they would both have to be registered.
Senator Tiffany:
How would we track an independent contractor?
Mr. DiCianno:
First of all, an independent contractor would have to be registered with the department with respect to business tax.
Senator Tiffany:
If you are an independent contractor of one, you do not pay a business activity tax, so why would you have to be registered?
Mr. DiCianno:
For sales, if there are sales.
Senator Tiffany:
Suppose there are no sales?
Mr. DiCianno:
I guess the best example I can give you is your lawn service person. He does not sell tangible personal property and he is not a retailer, so he is not registered for sales tax. However, he would be registered for business tax if he has employees working with him.
Chairman McGinness:
I think we need to distinguish between the college student who mows 20 lawns every week and the television repair person who is netting $150,000 a year. Perhaps if we can do this with some sort of exemption on everybody under $20,000, it would leave out the Avon people, et cetera.
Mr. DiCianno:
There is no question this is a policy issue with which this body needs to grapple. If we can provide any assistance in that analysis, we would be more than willing to do so.
Chairman McGinness:
I think we have to look at the idea too, if we include some of these people, is it going to cost you more to capture them than we are going to receive? At $50, it really is a question, is it not?
Mr. DiCianno:
That is correct. We would not send an auditor out to an Avon salesperson. It would make no sense at all.
Chairman McGinness:
We will ask Renee Parker to come forward to talk about Secretary of State fees. We might want to talk about those proposed in S.B. 298 and the amount of revenue we might gain.
Renee Parker, Chief Deputy Secretary of State, Office of the Secretary of State:
With respect to S.B. 298, we did our own analysis and worked with your fiscal division. The proposed fee increases overall total about $62 million in additional revenues over the biennium. The bill does not include any of the securities fee increases, or the notary fee increases included in both the Governor’s bill and the Care/Amodei bill, S.B. 382.
SENATE BILL 382: Makes various changes to provisions governing public financial administration. (BDR 32-721)
Chairman McGinness:
You mentioned notary fees and securities fees. Have you done any analysis of what rate you feel would be appropriate?
Ms. Parker:
We are comfortable with the 50 percent fee increase in the Governor’s bill for both securities and notaries, and Secretary of State Heller fully supports the Governor’s proposal. I believe S.B. 382 also proposed 50 percent for both of those fees. With respect to the securities fees, we have suggested you increase those by 100 percent. Even after doubling those, there would still be 15 to 20 states having higher fees than we do. Therefore, we do not foresee any impact to the revenues such that we would lose broker/dealers or have a licensing decrease. However, we are comfortable with the Governor’s proposal.
Chairman McGinness:
Mr. Combs, have you done analyses on those numbers, 50 percent, 100 percent, et cetera?
Rick Combs, Fiscal Analyst:
By working with the Secretary of State’s office, we have come to a projection. Because the fee increases would start October 1, the ones in S.B. 298 would generate $11.6 million in additional revenue the first year and $15.5 million the second year.
If you elected to increase the securities fees by 100 percent as Ms. Parker has indicated, and you increased the notary fees by 50 percent, it would generate approximately an additional $6.7 million in the first year and an additional $8.8 million in the second year.
Chairman McGinness:
From both of them?
Mr. Combs:
The lion’s share of that amount is from the securities fees. The notary fees at 50 percent increase would generate about $250,000 for a full year. That is in addition to the amounts already being generated by S.B. 298. I might point out the Governor, in the Executive Budget, had counted on receiving $28 million in fiscal year (FY) 2004 and $28.9 million in FY 2005 from Secretary of State fees. The Secretary of State had testified the fees could not be implemented until October 1, if they were not passed earlier in the session. The number in the Executive Budget, I believe, was based on a full year of collections in the first year.
Senator O’Connell:
What section of the bill deals with the $50 business license tax?
Mr. Combs:
In S.B. 298, the provisions affecting the business license fee are sections 81, 82, and 83. The $50 increase in the fee is in section 82. The expansion of the fee to sole proprietors is in section 83 where section NRS 364A.160 is repealed.
Senator O’Connell:
I think the number the resident agents have shared was something like $24 million a year. Is this business tax included in that figure?
Mr. Combs:
Yes, I think the numbers I had heard were something like $22.5 million and $20 million, at one point, but after looking at it, we think that is probably high for what they thought S.B. 298 would generate. Their amount did include the business license fee increase and the annual renewal of it.
Senator O’Connell:
So, if they said $20 million, then half of it is coming from the business license fee, not just the Secretary of State fees.
Mr. Combs:
Correct, and I think they were estimating the business license fee might generate around $10 million a year. That amount is significantly higher than the number just about anyone else is looking at, in terms of the Governors’ proposal, the task force proposal, or the Legislative Counsel Bureau Fiscal Analysis Division’s projections. However, I will not tell you they are not right. When you start looking at this type of an issue, where you are trying to determine who out there operates a business and would be subject to this fee, and who currently is operating a business but is not paying this fee, it is hard to determine what the number might be.
Senator O’Connell:
I just want to be sure I understand what you said. The resident agents have presented us with the proposal where they can raise approximately $20 million a year, but approximately $10 million of that is from the business license fee?
Mr. Combs:
Yes, and I will call it a misunderstanding, because when they were using the $20 million figure, I believe they were including the business license fee increase in that amount. We think it only generates, on the Secretary of State fee side, $11.6 million the first year and $15.5 the second, because in the first year, it does not start until October.
Ms. Parker:
In our calculations, we did not take into account the business license fee. We do not collect it and we did not calculate it. We calculated under the resident agent’s bill, on a yearly basis, about $15 million a year for the commercial recordings fee increases. With respect to the securities and the notary fees you were talking about earlier, we can manage those fees going into effect prior to October. It is the commercial recordings fees for which we needed the October date for some of the changes in our system. We figured $15 million, but if it does not start until October, we will lose about 3 months of the fiscal year, so the first year would be closer to the $9 million or $10 million. We figure $15 million in the subsequent years, not taking into account the business license fees.
Mr. Combs:
Based on Ms. Parker’s statement, I will revise my remarks on the securities fees and the notary fees because I had built in a 3-month delay in the first year. I will have the number momentarily.
Senator Tiffany:
I am a little confused. I have Mr. Hettrick’s plan sitting in front of me and then I have the proposal given to us today (Exhibit D). Various figures are shown and none of them seem to agree. Can you clear any of this up for me?
Mr. Combs:
The only thing I can possibly clear up is that you have a lot of different people out there giving revenue projections on various fee proposals and tax proposals. What I can tell you at the moment is our office’s estimate of how much each of these pieces of the puzzle is going to bring in and hope it helps. We have run some of these by the Secretary of State’s office this morning and I think we are in general agreement. Ms. Parker just indicated the fees in S.B. 298 would generate $15.5 million over a full year. Because it is not kicking in until October 1 of the first fiscal year, we are estimating $11.6 million in FY 2004 and $15.5 in FY 2005.
Senator Tiffany:
Are we even talking about the same fees?
Ms. Parker:
Each of the proposals, the Governor’s proposal, Assemblyman Hettrick’s proposal, the resident agent proposal, and the Care/Amodei proposal, all affect different fees. They are all the commercial recordings fees. The proposals by Care/Amodei and the Governor affect the securities fees and the notary’s fees. I believe Assemblyman Hettrick’s proposal has some of those fees, but the Governor’s bill increases all of the commercial recordings fees in our office by 50 percent. The Care/Amodei bill increases all of the fees except those increased by the 2001 Legislature in S.B. No. 577 of the 71st Legislative Session. Those included most of our fees except for the annual list fees.
The resident agent’s bill affects some of the fees increased last session. Most of them are fees not increased last session, but they take a different approach. They decrease the new filings fee. When you file a new corporation right now, you have a minimum of a $125 fee to a maximum of $25,000. The resident agents decrease the new filings fee and it is all based on capitalization. I think their argument is by decreasing the initial fee, you can attract more corporations. They then increase the annual list fee to a maximum of $11,000 on the capitalization basis. We would have to do some of the coding with the Department of Information Technology in our new system to do a capitalization structure for annual lists, thus causing a higher fiscal note.
Senator Tiffany:
If we are serious about voting on Secretary of State fees, it would be nice to have the breakdown of what those fees are. Does that get too complicated?
Mr. Combs:
It is certainly something we can put together, but you are talking about a lot of fees.
Senator Tiffany:
Maybe we should at least know the differences in the fees. Would that be too extensive too?
Mr. Combs:
None of it is too extensive. I will do whatever you ask me to do. The one thing I would point out is Senators Care and Amodei indicated it is the resident agents’ job to bring businesses to Nevada and they were taking a considered approach as to what fees could be lowered and which ones could be increased and still attract new businesses. With some of the other proposals, it was just a blanket 50 percent increase of either everything or certain things. The only two pieces not included in some manner or another in the S.B. 298 proposal were the securities fees and the notary fees. Those are possible items you might want to consider in addition to what was in S.B. 298.
Chairman McGinness:
By doubling the securities fees, as Ms. Parker has testified, we would still be in line. It would bring in $6.7 million in FY 2004 and $8.8 million in FY 2005.
Mr. Combs:
Since Ms. Parker indicated those could be implemented on July 1, 2003, those amounts would be closer to $8.6 million the first year and $8.8 million the second, and would be in addition to the S.B. 298 revenue. I would like to advise the committee, as we go along through the rest of the session, these numbers might change slightly since we are doing this on the run.
Senator Townsend:
According to this, the business license fee proposed by the Governor raised $8.5 million in the first year. The Secretary of State fees added $28 million for a total of $36.5 million. Senate Bill 298 currently would raise $11.6 million and now we are saying there is potential to raise another $8.8 million, so we are a little short on those two components.
Mr. Combs:
It is below what the Governor recommended. The other piece of the puzzle, though, is the business license fee and you have not done anything with it. The combined figure you mentioned from the Governor’s proposal included the business license fee.
Senator Townsend:
I thought S.B. 298 raised the business license fee from $25 to $50.
Mr. Combs:
Correct, but the $11.6 million you are looking at on the Secretary of State fees is just the Secretary of State fees. On top of that would be an additional $3.9 million.
Senator Townsend:
It is still half of what the Governor recommended. The Governor recommended $28 million and we have a $12 million shortfall between the two proposals.
Senator Coffin:
I want to divert a little from the Secretary of State’s fees, if I could. I do not want to call $1 million “chump change” anymore, but it has become chump change when you are looking at a deficit of $600 million to $1 billion. We voted here last week to kick out the biggest portion of the Governor’s tax bill. We might start taking the temperature of the committee on the substitute for the $250 million in revenue it would have generated. I think that is the kind of number we ought to be talking about. If we start to replace the big ones, after killing big ones, then we can talk about smaller ones. We have to begin to talk about what is possible and this committee only meets twice a week. We have to find out how we feel as a group about gross receipts versus sales tax on services.
Chairman McGinness:
Our date to complete action on this bill is May 8.
Senator Coffin:
That goal is commendable, but I do not know how I feel until I hear more testimony.
Chairman McGinness:
We will hear more testimony on the sales tax on services Thursday and will give the committee members an opportunity to digest the information.
Senator Coffin:
Do you trust the figures being bandied about on that particular bill?
Chairman McGinness:
I think we can question the proponents and make sure the whole committee trusts the figures.
We have before us the question of raising the notary fees 50 percent and the securities fees 100 percent. Does the committee want to take any action on these?
Senator Neal:
We are adding those amounts to what was already passed in S.B. 298?
Chairman McGinness:
Correct.
Senator Neal:
I will vote in favor of this proposal and, hopefully, we will not be blindsided again in terms of tax increases from another committee.
SENATOR TOWNSEND MOVED TO INCREASE NOTARY FEES 50 PERCENT AND TO INCREASE SECURITIES FEES 100 PERCENT.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Chairman McGinness:
We will now direct our attention to page 4 of the worksheet (Exhibit D) and look at the quarterly restricted slot tax. The Governor’s proposal would increase the fees on the operation of restricted slots by approximately 33 percent. The Care/Amodei proposal increased the fees for the first five slot machines by 31 percent and 35 percent for machines 6 through 15. Both proposals are pretty much in the same ballpark as far as money generated. I think the idea is no matter which proposal we go with, a flat fee per machine would be a lot easier to administer.
Mr. Combs:
In the Care/Amodei proposal there was a $12 difference between what an operator with more than five machines would pay for the first five. I am not sure this was on purpose, but the $12 does not seem to make much of a policy statement in terms of changing anything. It makes it a bit confusing as to why the math was not done right. I think rather than having the $12 difference, you would pay the flat fee for the first one through five machines.
Senator O’Connell:
I want it noted for the record, this particular tax really does hit the small businessperson, which is the reason I will not support it.
Chairman McGinness:
I think what we are talking about amounts to $20 per quarter.
Mr. Combs:
If you look in your bill books at page 87 of S.B. 382, the amount for machines one through five under the Care/Amodei proposal, would increase from $61 per quarter to $80 per quarter. The fee for machines six through fifteen would increase from $106 to $143. The $12 difference I was discussing a moment ago can be seen in paragraph (b) on line 7 where it says “$412 plus $143.” If you will notice in paragraph (a), the first five machines are taxed at $80 each. Eighty times five is $400. I would think you could change line 7 to show $400 instead of the $412.
Senator Neal:
We can include that in my motion.
SENATOR NEAL MOVED TO ADOPT THE CARE-AMODEI QUARTERLY RESTRICTED SLOT TAX PROPOSAL AS AMENDED.
SENATOR RHOADS SECONDED THE MOTION.
Senator Townsend:
To get back to an issue I think is very important because it gets to the heart of why the expenses in this State are so high, it would certainly be important for the purposes of discussion, hopefully to amend the motion to perhaps include an additional tier in the areas of those who sell food and allow smoking. If you are going to allow someone to smoke around a slot machine while you are selling food, and we are talking specifically about grocery stores, I think you ought to have another tier and it ought to be rather substantial. We have a huge health care problem in this State driven a lot by the results of smoking and I find it an absolutely disgusting thing to have to walk into a grocery store and walk by smoke. If the maker of the motion wants to consider this, I would appreciate it, but if not, I certainly understand.
Senator Rhoads:
On the other hand, if you do not like going into grocery stores allowing smoking, go into one that does not.
Chairman McGinness:
Is there a second to Senator Townsend’s motion?
Okay, we are back to the original motion by Senator Neal and seconded by Senator Rhoads to go with the Care/Amodei quarterly restricted slot tax proposal with Mr. Combs’ clean-up language included.
THE MOTION PASSED. (SENATORS O’CONNELL AND TIFFANY VOTED NO.)
*****
Chairman McGinness:
On page 4 (Exhibit D), you will see the different proposals for taxes on admissions or amusements. With the Governor’s proposal, video rentals and participatory activities would be exempted. The task force’s proposal is similar and the Care/Amodei proposal would include pretty much everybody and includes golf, tennis, and other participatory activities. Their proposal exempts the first $10.
Senator Townsend:
Regarding the $10 exemption in the Care/Amodei proposal, it is my understanding it is very difficult to exempt up to a certain level. I am not saying it is not the right policy and I respect Senators Care and Amodei for putting it on the table, but I do not know how you would do it. When the consumer goes into a store to buy something, is the person selling the product going to have to have a different computer system?
Mr. DiCianno:
From a practical standpoint, it would be complicated for a retailer to try to tier a machine to do that, because I do not think it exists right now. I really am not the person to be asking. I think you would need to talk to your retailers. They would be the ones impacted, not the department.
Senator Townsend:
I think Senator O’Connell made a point about doing everything we can to make sure the average family in this State is substantially considered as we debate this. I cannot support a tax either on video rentals or on movies. I think those are things the average Nevadan uses on a regular basis as forms of entertainment. There are approximately three very large movie distribution companies in the State of Nevada. If you put a tax on a movie ticket, those companies are not going to sell you a ticket for $8.06 cents, or whatever the number comes out to be. They are going to round it up to the next dollar and keep the difference themselves. They will profit and the consumer will get less of a benefit than paying the tax.
I just think we need to do everything we can to help the average Nevada family. For many people, movies and videos are the only opportunity for entertainment to be with their families. So, with regard to the issue of video rentals or movies, those are two things I certainly cannot accept. I understand it is a lot of money, but I just want to make sure the average family is not going to be impacted by something that could be manipulated.
Senator O’Connell:
I think there was some information presented to the Senate Committee on Legislative Affairs on functions on the monorail. I do not think the monorail has been talked about a lot. I know we tax the taxicabs. If you take a ride in a cab from the MGM to the Sahara Hotel, I think you are looking at about $11 plus the tax. If you take a cab from the Bellagio to the Venetian, I think you are looking at about $6. I believe the ticket price the monorail has talked about is around $2.50 and I have heard some tremendous numbers of what the ridership is. I want to say 19,000 a month, which might be way out of the ballpark. I am just wondering if that might be something we would want to tax.
Chairman McGinness:
Is the monorail a private enterprise?
Senator O’Connell:
It is a private enterprise, but the State has backed the bonds for building it and I know they are planning on taking it to the airport as well as the downtown area. I think it will be done with federal money as well as some local money and private money.
Senator Neal:
I hear what Senator O’Connell is saying, but we are talking about taxing something not even existing at the moment. I do not know when the monorail will be completed or when it will have a ridership for which you could make a determination as to what the cost would be or how you would tax it.
Senator O’Connell:
It is supposed to be completed before the end of the year.
Senator Neal:
I have not seen any activity downtown.
Senator O’Connell:
This is all on The Strip right now.
Senator Rhoads:
I have a real problem with any of these taxes on admissions or amusements. I think you are getting a lot of the lower income people. It seems kind of odd to tax somebody when they are having fun. I do not think I can support any of these. I think we can make it up somewhere else.
Senator O’Connell:
Based on the list with which we have been presented, I think I feel the same as Senator Rhoads. I think we should be looking at something higher end.
Chairman McGinness:
We will leave this one on the table for another day.
Senator Neal:
You might want to look at the fact entertainment tax is put on the smaller rooms, but the 2700-seat theaters are exempt under our statute. There is a lot of money involved.
Chairman McGinness:
I think the concerts were included in the Governor’s proposal and we will take a look at it.
We are adjourned at 2:59 p.m.
RESPECTFULLY SUBMITTED:
Ardyss Johns,
Committee Secretary
APPROVED BY:
Senator Mike McGinness, Chairman
DATE: