Business license tax proposed

County officials are considering a business license tax, which could generate about $500,000 to $700,000 annually for the county's general fund, Assistant County Manager Michael Brown told members of the Gardnerville Town Board Tuesday.

"I can see the business side of it," said Jerry Smith, vice-chairman of the town board.

"I agree something needs to be done with respect to business licenses, but businesses are getting hit with everything.

"For example, the state used to send out posters that businesses were required to put on the wall. Then the state formed a whole new department, put out plastic laminated posters and charged businesses $75 each," he said. "All these business owners will think the county is getting more money, and they're getting hit."

Town Board member Paul Lindsay said a sole proprietor will need two business licenses, one from the state and one from the county.

Douglas County has tried twice to put a business license tax in place twice and there was real opposition both times, Brown said.

"We're not expecting a celebration this time either," he said.

In addition to adding revenues for community services like courts and the sheriff's office, the license has a regulatory function, making it easier for officials to address any health and safety issues, Brown said.

"I understand it must be done from a health and safety standpoint, but this proposal has always been the kiss of death for any elected official," said Town Board Chairman Randy Slater. "No one will touch it and then it dies on the vine. From the standpoint of health and safety and revenue generation it must be done, but it will mean bedlam at the commission meeting when it comes out."

Most Nevada counties have a business license fee that provides a solid, growing revenue stream. Communities use a number of formulas for determining the cost of that license. A business's square footage and the number of employees could be used in the formula for determining a rate, Brown said.

Representatives from the business community, and other factions will work on a formula for the new tax, which could be phased in over three months and implemented in January 2008, Brown said.

"We've organized a group to develop options," he said. "Eighty-five percent of Douglas County businesses employ less than 15 people and a flat fee would create inequities."

At their Aug. 2 meeting, the Board of County Commissioners approved a 2 percent utility operator (franchise) fee for telephone, electric and gas utilities. The tax increase will be imposed over a two-year period and should generate $850,000 annually for each 1 percent levied.

Commissioners also approved a 911 communications fee, which imposes a surcharge of no more than 25 cents per month for each phone and cell phone line, the money dedicated to enhancement of the telephone system.

County officials considered the tax increases following drops in numerous tax revenue streams, everything from sales and room taxes to home sales.

Figures from the Nevada Department of Taxation for May 2007 show sales tax revenues dropped just over 11 percent in Douglas County from the same month last year.

The drop is due at least in part, to an 11 percent decrease in motor vehicle sales and the weak housing market. Building material sales fell about 23 percent and furniture sales are down 72 percent in Douglas County, according to a report by Capitol Bureau reporter Geoff Dornan.