CARSON CITY, Nev. (AP) - As they look for ways to stem a projected $1.2 billion budget shortfall, Nevada lawmakers passed a bill to require mining businesses to pre-pay their taxes based on an estimate of annual activity proceeds.
A chorus of progressive activists argued that the pre-payment plan - similar to one passed after the Great Recession - was insufficient action. Nevada, they said, needs to update the formula and deductions that determine the tax burden for the multi-billion dollar mining industry.
On Thursday, the Legislature’s Democratic leadership revealed plans to limit deductions that mining businesses could claim to 60% of net costs, according to a bill draft obtained by the Nevada Independent. The move could bring an additional $54.7 million in projected revenue to the state general fund.
Democrats would have to sway one Republican in the Senate to obtain the two-thirds majority necessary to change tax structures.
Lawmakers are expected to convene Thursday evening to vote on a proposed $563 million budget cut package to address a revenue shortfall stemming largely from pandemic-adjusted sales and hospitality tax projections.
Under Senate Bill 3, which was passed by the state Senate and Assembly late Wednesday, businesses would pay a portion of the Nevada Net Proceeds on Minerals tax by March 1 until 2024.
Lawmakers hope collecting this year’s tax as well as pre-payment on next year’s will help avoid cuts to state services during the pandemic and economic downturn.
Businesses would pay the portion of their taxes early that goes to the state general fund and continue to pay the portion that goes to school districts and local governments on a quarterly basis.
The bill now goes to Democratic Gov. Steve Sisolak for consideration. His office did not immediately return messages about whether he will sign it.
Mining businesses pay $122.7 million annually in taxes to state and local governments, according to the Las Vegas Review-Journal.
Final-hour amendments to Senate Bill 3 also restructured how the state will allocate vehicle registration fee revenue to direct 100% to the general fund. Previously, revenue was split between the general fund (25%) and State Highway Fund (75%).
In total, the bill will divert a projected $147 million to Nevada’s general fund.
The state Senate’s Republican minority released an alternative proposal to balance the state’s budget Thursday. The proposal assumes the federal government will provide additional funds for Medicaid recipients and allocates millions more of Nevada’s federal relief dollar stockpile - which wasn’t included in the proposed general fund balance statement presented last week - to stave off cuts to health care and education.
“Utilizing CARES Act funds to recognize teachers who also return to school will help make school reopening possible,” Sen. Scott Hammond, R-Las Vegas, said.
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