A Carson City District Judge today ruled an initiative petition being circulated by teachers to levy a 2 percent tax on companies making gross revenues in excess of $1 million a year to raise money to support public education is invalid.
In his ruling, Judge James Wilson found that the description of effect used to explain to voters the intent of the petition is incomplete.
The validity of the petition was challenged by a group of Nevada business groups called the Committee to Protect Nevada Jobs.
"The Committee (to Protect Nevada Jobs) argues the description needs to tell those being asked to sign the petition how much revenue the tax will generate," Wilson said. "The court agrees the amount of revenue is an effect that those being asked to sign the petition should know.
"Failure to inform those being asked to sign the petition is a failure to explain a material ramification of the initiative," he said. "The amount of revenue the tax will probably generate must be included in the description. Failure to include the probable amount invalidates the petition."
The Nevada State Education Association, which has already collected between 55,000 and 60,000 signatures to take the margins tax proposal to the Legislature next year, is expected to appeal the decision to the Nevada Supreme Court.
The group has until Nov. 13 to collect a minimum of 72,352 signatures to take the measure to lawmakers. The Legislature would then have 40 days to approve the proposal or it would go to the voters in 2014.
The proposed Texas-style margins tax would raise an estimated $800 million a year for public education.
Wilson's ruling prohibits the petition from being submitted to the Legislature next year or to voters in 2014.