Carson City judge fixes commerce tax petition; backers have 30 days to collect signatures
May 25, 2016
A new Description of Effect for the petition to repeal the commerce tax was approved by Carson City District Judge James Wilson late Friday.
Although Craig Mueller, lawyer for the RIP Commerce Tax PAC, said they will have new petitions printed Saturday, that leaves them just 30 days — until June 21 — to collect 55,234 signatures of valid Nevada voters in order to qualify for the November ballot.
That will be a major challenge since it took the group four months to collect the 20,000 plus signers on the now invalid original petition and, normally, petition drives need at least 20 percent more signatures than the minimum because of the number of duplicates and unregistered signers.
Opponents of the commerce tax led by Controller Ron Knecht filed the petition in October asking voters to repeal just that portion of the tax and revenue package in Senate Bill 483 that deals with the commerce tax.
That tax would apply to all businesses operating or located in Nevada that have gross income totaling more than $4 million a year. They would pay a tax rate differing according to which of 26 different business classifications they belong to.
Opponents immediately charged it was nothing more than a new version of the margins tax voters defeated in the last election by a margin of more than two to one.
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The petition, filed as a referendum, passed muster before Judge Wilson but was tossed out by the Nevada Supreme Court which said opponents rightly argued it failed to tell voters what the impact of its repeal would be: specifically it didn't say repeal would unbalance the state budget in violation of Nevada's constitution. The high court also said it failed to explain repeal would require either raising some other tax or cutting back programs.
Repealing the commerce tax would cut an estimated $74.9 million in revenue from this fiscal year's budget and $59.9 million next year.
The rewritten Description of Effect cures those issues but, the way it was written, a yes vote would etch the tax in stone while a no vote would repeal it.
It clearly says if voters support the commerce tax provisions, it can't be amended or changed in any way except by another vote of the people. If disapproved, the referendum would eliminate the tax.
It also says a no vote would unbalance the budget, requiring the Legislature to either cut programs back or raise revenues through another tax.
It finally points out eliminating the tax doesn't prohibit lawmakers from enacting another version of the tax.
Knecht and his backers have said they have funding to hire signature gatherers and are going to have petitions with the new language printed this weekend.
To get on the November ballot, they have to not only collect 55,234 valid signatures of Nevada registered voters, but collect at least 13,809 of them in each of Nevada's four petition districts — the state's congressional districts.