Carson City District Judge James Wilson today ruled a teacher-backed proposal to impose a margin tax in Nevada cannot go forward because it violates a "single-subject" rule for such measures.
Wilson said because the initiative petition proposes both the tax and a requirement for certain taxpayer information to be made public as part of the measure, it deals with two subjects.
Wilson said the Secretary of State's office is enjoined from submitting the petition to the Legislature in 2013 or to the general election ballot in 2014.
The petition, filed by the Nevada State Education Association in June, sought to levy a 2 percent tax on companies making gross revenues in excess of $1 million a year. The association was waiting until Wilson's ruling before circulating petitions to gather the necessary signatures to take the measure to the Legislature next year, and then to the voters if lawmakers failed to act.
The petition was challenged in court by the Committee to Protect Nevada Jobs, which argued it violated the single-subject rule. The committee also argued the 200 word description of effect of the proposal was inadequate.
Wilson ruled the description of effect was proper and rejected the committee's arguments.
But because the petition also sought to have information identifying the companies paying the margin tax and the amount they paid published on a website by the Department of Taxation for the public to review, it improperly encompassed two subjects, he said.
"Imposing a tax to support Nevada schools and changing current tax law to make certain tax record information public are not functionally related and germane to each other in a way that provides sufficient notice of the general subject of, and the interests likely to be affect by, the proposed initiative," Wilson said in his decision.
Other challenges to the singe-subject rule raised by the Committee to Protect Nevada Jobs were rejected by Wilson.
Teachers are seeking the new tax to bring in as much as $800 million a year for public education.
Lynn Warne, president of the NSEA, said after the hearing last week that if Wilson ruled only in a limited way against the petition, that the association might revise the proposal and re-file it with the Secretary of State's Office so the signature gathering effort could begin. There was no immediate response on what the NSEA will do as a result of today's ruling.