Gaming Tax Hike Sought As Alternative To Possible Margin Tax Ballot Measure

CARSON CITY – Las Vegas businessman Monte Miller said today he is seeking a hike in the gaming tax for the state’s largest casinos to offer the Legislature and voters one more revenue option in the face of a possible Texas-style margin tax that could appear on the ballot.

Even at the proposed 9 percent rate on net casino gambling revenue above $250,000 per calendar month, Nevada would have the lowest effective tax rate in the world, he said in a telephone interview today.

Slot machine / Photo by Jeff Kubina @ Wikimedia Commons

Under current law, net casino gambling revenue in excess of $134,000 per calendar month is taxed at a 6.75 percent rate.

Miller, through a group called Nevadans for a Fair 9% Gambling Revenue Tax (NF9GRT) on Tuesday filed a statutory initiative petition with the Nevada Secretary of State that would create the new, higher rate.

The proposal, along with another to provide for a possible increase in the mining tax filed last week, are meant to providing voters and policy-makers with options in light of an anticipated ballot proposal from Danny Thompson, executive secretary-treasurer of the Nevada State AFL-CIO, to create a 2 percent margin tax based on the Texas model to provide increased funding for public education. Thompson could not be reached for comment on the status of his expected tax proposal.

Thompson and the other groups expected to support the margin tax ballot measure have not yet filed an initiative petition with the Secretary of State’s office, but Miller said there is plenty of time to do so.

If you look at Texas, and what they’re going through with the Texas margins tax, which is the template for what Mr. Thompson is doing, it’s a destructive, terribly complex tax,” he said. “And you couldn’t have a worse income tax in your state. And so we think the people of Nevada need an alternative.

Las Vegas businessman Monte Miller.

“This would be the first income tax in the state of  Nevada,” Miller said. “We’ve got to give people a choice.”

Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, wrote an article this week calling the tax unfair to small business and an “abject failure,” in Texas.

Miller said a 9 percent rate is a fair tax rate for the biggest casino operations. The number that surprised him comes from Indiana, where that state collected nearly $875 million in taxes from 11 casinos in 2010. Nevada collected $835 million in 2010, he said.

Indiana’s tax rates go from 15 percent to 40 percent.

“We’re not asking for 15 percent, we’re saying 9 percent, (it) still would be the lowest in the world, the lowest effective tax rate in the world,” he said.

“This initiative represents a 33 percent tax increase on the gaming industry, which would be reckless and irresponsible,” Virginia Valentine, president of the Nevada Resort Association, said in an email to the Associated Press. “We are currently reviewing the language. If this effort is indeed legitimate, we will oppose it vigorously.”

Miller said the proposal is not a tax on all casino revenue.

“If our initiative becomes law, it will not increase taxes on room rates, shows, shopping or restaurants in casinos,” he said. “Nor would it increase taxes on small casinos, taverns or convenience stores.

“Nevada’s individuals and small businesses are overtaxed,” Miller said. “By fairly taxing the billions of dollars that big casinos win from high-rolling gamblers, we can lower taxes and fees on individuals and small businesses who are struggling during these tough economic times.”

The group will have to collect 72,352 valid signatures from Nevada voters by Nov. 13 to send the proposal to the Nevada Legislature in 2013. If the Legislature did not enact the proposal, it would go to voters in 2014 and take effect in 2015 if approved. The Legislature could also opt to put a competing proposal on the ballot for voters to consider.

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Audio clips:

Las Vegas businessman Monte Miller says a Texas-style margins tax would be destructive in Nevada:

020812Miller1 :26 in your state.”

Miller says even at 9 percent, the top gaming tax rate would be the lowest in the world:

020812Miller2 :10 in the world.”