Posts Tagged ‘retail association’

Online Sales Increasingly Cutting Into Tax Dollars, Says Retailers’ Group

By Anne Knowles | 2:00 pm September 1st, 2011

Nevada could take in $16 million less in tax dollars this year due to online sales, according to a new report by the Retail Association of Nevada (RAN).

Sales tax currently accounts for 28.3 percent of the state’s general fund revenue while gaming taxes bring in 23.6 percent. Nevada ranks 11th in the nation in terms of sales tax reliance, according to a Congressional Research Service report, while the state’s maximum sales tax rate, 8.1 percent in Clark County, ranks 20th.

According to RAN, internet sales means Nevada will lose upwards of $16 million in 2011, with other reports estimating as much $100 million lost annually. The Economic Forum forecasts the state will collect about $815.3 million in sales and use tax in 2011.

“As e-commerce becomes increasingly popular, Nevada faces ever greater sales and use tax revenue losses,” said Mary Lau, RAN president, in a statement on the findings. “Current estimates may only predict losses equivalent to 0.5 percent of total sales and use tax collections, but the impacts are certain to grow larger with time.”

Technically, buyers are supposed to pay a use tax with the state for purchases made online, but many consumers are either not aware of the tax or rarely pay it and is almost impossible for the tax department to monitor.

“It’s an odd tax, because the costs of compliance are actually higher than the costs of evasion,” said Geoff Lawrence, deputy director of policy at Nevada Policy Research Institute in Las Vegas.  “One alternative could be to require online retailers to email shoppers at the end of each year with their total purchase amount throughout the year and informing them of their total use tax liability, directing them to remit the use tax directly to the Nevada Department of Taxation.  An alternative like this would get around many problems while still protecting the privacy of individuals.”

Lawrence said states have no authority to collect sales tax from entities that have no physical presence in the state.

A bill amendment to tax online retailers failed during the 2011 Nevada legislative session.

Nevada is a member of the Streamlined Sales Tax Governing Board, a national effort to reduce the complexity of sales tax compliance so online retailers could be required to charge state sales on their goods sold.

 

State Senate Republican Offers Bill To Exempt New Employees from Modified Business Tax

By Sean Whaley | 6:41 pm March 1st, 2011

CARSON CITY – A Republican state senator has proposed his own idea for job creation: A break on the modified business tax for new employees hired by employers after July 1, 2011.

Sen. James Settelmeyer, R-Gardnerville, said Senate Bill 199 would exempt new employees hired by Nevada businesses from the tax as an incentive to add workers to their payrolls. Co-sponsors include five other Republican lawmakers. The measure was introduced Monday.

“The concept is based on the payroll tax, which unfortunately unfairly burdens employers based on how many employees they have,” he said. “Only if it is a brand new additional employee – above and beyond what you currently have – the new employee will not have the payroll tax charged upon them for one year.”

Settelmeyer’s jobs proposal comes as Democratic leaders in both the Assembly and Senate are touting their own job creation initiatives, including a plan to use some existing revenues to bond to build public works projects, and another to create a bidder’s preference on such projects for companies that hire Nevada workers.

SB199 has been referred to the Senate Finance Committee but no hearing has been scheduled yet.

Settelmeyer’s bill would require employers to demonstrate that any employees hired under the tax exemption are new additions to a firm’s current workforce, but there would be no limit to the number of new hires that could be included in the exemption. The exemption would be available to existing businesses only.

Bryan Wachter, director of government affairs for the Retail Association of Nevada, said the organization typically opposes tax exemptions or abatements but believes Settelmeyer’s proposal is a positive job-creating measure.

“We do see this as a private sector jobs creation bill,” he said. “Anytime you can stimulate private sector hiring without relying on public sector dollars, that is a good thing.”

Nevada’s nearly 15 percent unemployment rate does not appear as if it will decline anytime soon, and the tax incentive in SB199 could assist in reversing that trend, Wachter said.

Randi Thompson, the local representative for the National Federation of Independent Business, said the bill is a good start to getting Nevadans back to work.

“Anything that would encourage hiring is a good thing,” she said.

Thompson said she remains concerned, however, about the Legislature’s intentions as to the current rates of the modified business tax.

Nevada’s modified business tax is based on an employer’s gross payroll, after deductions for health insurance benefits paid by the employer. The 2009 Legislature increased the tax rate from 0.63 percent to 1.17 percent for large businesses as a way to balance the current budget.

At the same time, it reduced the rate to 0.5 percent for small businesses. Both changes will expire on July 1, 2011, unless the Legislature takes action.

Gov. Brian Sandoval wants to let the increase for large businesses expire, but he wants to continue the lower rate for small businesses for the upcoming two-year budget.

Settelmeyer said he has been told by small businesses that the exemption could make the difference between hiring a new worker and waiting. Larger casino operators have made similar comments, he said.

Audio clips:

Sen. James Settelmeyer says the payroll tax burdens employers based on the number of employees:

030111Settelmeyer1 :08 employees they have.”

Settelmeyer says only new employees would be eligible for the exemption:

030111Settelmeyer2 :08 for one year.”

Nevada Retail Sales Outlook For 2011 Positive

By Sean Whaley | 1:54 pm February 28th, 2011

CARSON CITY – Based on the latest taxable sales results, Nevada will likely match national forecasts calling for 4 percent growth in retail sales for 2011, the Retail Association of Nevada said today.

Much of the growth will likely be in areas other than discretionary spending, however, the group noted in its release.

Statewide, December and fiscal-year-to-date taxable sales comparisons to the prior year are largely positive, with sales up 11.2 percent in Nevada in December and 4.9 percent for the fiscal year-to-date.

Several counties are reporting somewhat less encouraging results, including Douglas, which was up just 0.3 percent for the month and is down 1.0 percent fiscal year-to-date. Washoe County reported a 5.6 percent increase in December and a 1.5 percent increase for the six month period ending in December. Carson City is up 4.9 percent in the latest month and 5.8 percent thus far in the current fiscal year. In Clark, sales are up 2.8 percent and 2.4 percent in December and fiscal year-to-date, respectively.

The review of the taxable sales data was authored by Applied Analysis, a Nevada-based firm providing information and analyses for both the public and private sectors.

The report shows that most of the significant growth is taxable sales activity – some of it in the triple-digit percentages and in the hundreds of millions of dollars – was generated in rural counties such as Elko, Esmeralda, Humboldt, Storey and White Pine. Sizable taxable sales gains in these counties are largely attributed to growth in sales related to utilities, mining and manufacturing equipment purchases.

So increases in taxable retail spending in rural jurisdictions appear to be less attributable to individual consumers, and more the result of rural industry investment. While still encouraging, much of this industrial investment is nonrecurring in nature.

Mary Lau, president of the Retail Association of Nevada, said core retailer categories reported mixed results in December statewide, with pockets of both encouraging results in auto sales, clothing and Internet retailers, and less encouraging results in building materials and general merchandise sales.

“With continued growth in mining and mining-related activities, it is likely Nevada will report gains in taxable sales consistent with national expectations for 2011,” she said. “However, it remains to be seen how much of that growth will be attributed to substantial improvement in consumer discretionary spending in our larger metropolitan areas, as opposed to relatively isolated growth occurring in our more rural areas.”

Based on seven consecutive months of national retail sales growth and better than expected holiday sales, the National Retail Federation (NRF) is projecting a 4 percent increase in retail industry sales (excluding automobiles, gas stations and restaurants) in 2011. However, the federation cautions that rising commodity prices and continued high unemployment could become obstacles to economic growth.

With the price of oil rising to a new two-year high this week as unrest in the Middle East escalates, concerns about potential stagflation conditions are not entirely without merit.

In December, Clark County reported increases in sales in accommodations and eating and drinking places of 13.7 percent and 17.6 percent, respectively.  However, high oil prices mean high gasoline costs and rising airfare, both of particular concern to the Nevada tourism industry. The tourism industry and visitor spending strongly affect retail sales throughout the state.


Business Group Sees Tax Hike On Horizon, Opposes Idea Of Major Overhaul Of Nevada Revenue Structure

By Nevada News Bureau Staff | 11:04 am September 28th, 2010

CARSON CITY – The head of Nevada’s Retail Association says a tax increase will likely be needed to balance the state budget next year, and expanding the sales tax to include at least some services is one place to look.

But Mary Lau, president and chief executive officer of the Retail Association of Nevada, said it is not the time for Nevada policymakers to look at a major revamping of the state’s tax structure.

“To try to switch an entire tax system, I will agree with the people that were polled, it is not the time to do an entire tax restructuring or anything else because guess what, the other states that have those other programs are equally in trouble,” she said.

Lau made her comments during an interview Monday with Jon Ralston on the Face To Face television program. She was interviewed following the Retail Association’s release of a poll conducted on behalf of the group looking at Nevada political races and the public’s views on issues including whether taxes should be increased.

The poll was conducted by Public Opinion Strategies pollster Glen Bolger.

The poll shows that only 1 percent of those interviewed support a tax increase on small business, 5 percent support a tax increase on large businesses, 11 percent on casinos, 5 percent on mining companies, 12 percent on the rich and 1 percent on the middle class. Seventeen percent said taxes should be raised on everyone.

Support for raising taxes on everyone was lower than in previous polls however.

Lau said the change is a reflection of the current economy.

“A reflection of we don’t have a job, we don’t have any money therefore how are we going to pay,” she said.

Lau said a tax increase, even if it is only the continuation of a package of revenues hiked by the Legislature in 2009 and scheduled to sunset on June 30, 2011, is likely. The state budget cannot be balanced without a tax increase, she said.

There are areas the state hasn’t taxed, such as services, Lau said. An examination of tax abatements and exclusions the Legislature has put in place over the years is also needed, she said.

Both major party candidates for governor have rejected the idea of tax increases to balance the state budget, although many legislative leaders have said new revenues will likely be necessary.

Lau agreed that a discussion of taxes won’t come until after the Legislature first looks at reforms and efficiencies in state spending.

Audio clips:

Retail Association Chief Mary Lau says now is not the time to revamp Nevada’s tax structure:

092810Lau1 :12 equally in trouble.”

Lau says the economy has dampened public support for a tax increase:

092810Lau2 :11 to sound bites.”

Lau says taxing services and eliminating exemptions is one place for Legislature to look for new revenue:

092810Lau3 :05 of the services.”

Back To School Spending Could Be Boon To Nevada Retailers Hit Hard By Recession

By Nevada News Bureau Staff | 4:08 pm August 3rd, 2010

CARSON CITY – Nevada families with school-age children will spend $174 million for back-to-school supplies this month if spending trends track with national estimates, the Retail Association of Nevada reported today.

Just under 30 percent of an estimated one million households in Nevada are expected to have one or more children in grades kindergarten through 12. According to the National Retail Federation (NRF), the average American family will spend $606 on clothes, shoes, supplies and electronics to prepare to head back to school. This translates into approximately $174 million in back-to-school spending by Nevada families.

Nevada’s estimated 435,000 school children are headed back to school at the end of August, and if spending trends in Nevada resemble those being reported nationally, they will be spending approximately 10.5 percent more per family than last year.

Mary Lau, president of the Retail Association of Nevada, said: “If national forecasts hold true, a 10.5 percent increase in back-to-school spending would be fantastic news for Nevada retailers. However, increased national spending forecasts this past Christmas shopping season did not come to pass for many of them.

“Consequently, we remain cautiously optimistic that increased expectations for spending during this back-to-school shopping season will materialize within the state,” she said.

With Nevada having the highest unemployment rate in the nation at 14.2 percent as of June, “it seems somewhat unlikely that we will witness the extent of increases expected for the nation’s retailers,” Lau said.

The largest category of back-to-school spending is clothing, with families estimating they will spend $225 on pants, shirts, and jackets, among other apparel. The latest taxable sales results in Nevada suggest clothing sales are on the rise, with sales up 10.7 percent year-over-year for the month of May.

Overall Nevada taxable sales have been lagging for many months, however, with growth seen only once in 21 monthly reports through May 2010.

In the NRF survey, electronics were a close second, with families expecting to spend $182 on laptops, smart phones and MP3 players. Families expected to spend $103 on shoes, and finally, $96 on school supplies.

Families with college-aged students are expected to spend $616, down slightly from the previous year’s $618, on new apparel, furniture, school supplies and electronics. With the U.S. Census Bureau’s American Community Survey estimating 127,000 students enrolled in college and graduate programs in Nevada, this translates into an estimated additional $78 million spent by those requiring back-to-school purchases to pursue higher learning.

The Retail Association of Nevada also reports that in addition to having the highest unemployment rate in the nation, the state has one of the highest rates of homelessness among school children and school children living in poverty. Despite smatterings of positive developments in the state, challenging economic conditions may depress back-to-school expenditures for a significant number of families this season, the association said.

The data was generated for the association by Applied Analysis, a Nevada-based firm providing information and analyses for the public and private sectors.

Gibbons Defends Budget Plan, Challenges Nevadans to Provide Alternatives if they Disagree

By Sean Whaley | 4:43 pm February 17th, 2010

CARSON CITY – Gov. Jim Gibbons today defended his plan to balance the state budget and challenged critics to come forward with workable alternatives if they object to any parts of his proposal.

In formally calling the Legislature into special session on Tuesday to deal with a massive funding shortfall, Gibbons yesterday released his list of proposals to balance the budget. It contains 40 different items, from 10 percent budget cuts to state agencies and education to taking $12.6 million from a scholarship fund.

The proposals cut spending in the current two-year budget by $895 million.

“If anyone else has any ideas on how to fix it, I am listening,” Gibbons said. “This criticism does not recognize that this problem is fixable, and I have presented a plan to fix it.”

The Legislature’s Interim Finance Committee will meet tomorrow and Monday to review Gibbons’ budget balancing proposals and review other options available to them.

Gibbons’ call for critics to produce their own solutions received some support today.

Mary Lau, president and CEO of the Retail Association of Nevada, said: “Work together people. If you don’t like this $20 million idea, then come up with a different $20 million idea. Instead we get the immediate response that the governor is mean-spirited. Where is the policy in that?”

Senate Majority Leader Steven Horsford, D-Las Vegas, was quoted in the Reno Gazette-Journal as saying: “This governor is mean-spirited and continues to put education last instead of first.”

Horsford said Gibbons has rejected some legislative proposals to reduce spending and instead proposed what he views as unacceptably large cuts to education.

Lau said the state needs productive discussions to get out of the budget crisis, not posturing.

While Gibbons said today his proposal to eliminate some deductions provided to the mining industry to generate $50 million in new revenue to the state is not a tax, Lau disagreed. Bringing more revenue into the state, particularly without the cooperation of the industry, is clearly a tax increase, she said. But she added it may be an effort to bring the industry to the table to forge an agreement on some type of revenue enhancement.

In contrast, Lau said the proposal to ensure sales taxes from purchases made over the Internet are appropriately levied and collected by the state is a legitimate endeavor and not a new tax.

Carole Vilardo, president of the Nevada Taxpayers Association, said Gibbons’ plan is a starting point that at least is on the table for public discussion and comment.

“It has been said by (Gibbons) and the Legislature there are no easy solutions to this,” she said. “I’m sure there are other elements that will surface. If some cuts are considered to be too steep there may be compromise, and cuts may be minimized in one area with greater cuts elsewhere.

“But in an economy like this there is nothing anyone can do that is going to be totally embraced as wonderful,” Vilardo said.

Vilardo agreed that the mining industry proposal is clearly a tax increase. But until details emerge on what “loopholes” Gibbons is proposing to eliminate to generate the new revenue, she had no further comment on the proposal.

Sen. Mike Schneider, D-Las Vegas, acknowledged that Gibbons at least has released a plan to balance the budget.

But he criticized the proposal to sweep the reserve fund that pays for the homeowner association Ombudsman’s Office, a position in the state Real Estate Division that resolves association disputes that Schneider worked to establish in 1997.

The fund is generated by a $3 fee per home per year and is only paid by residents of associations, he said. Taking the fund is the equivalent of levying a tax increase on one segment of the state.

“You can’t sweep that fund,” Schneider said. “It’s not general fund. It is specially set aside to run the ombudsman’s office. That is going to irritate a lot of people.”

The state Budget Office said today that only $500,000 of the $2.7 million in the ombudsman account is being proposed to be used as part of Gibbons’ budget balancing plan, not the entire amount.

Asked for an alternative to the proposal, Schneider said a better way to raise taxes would be to close loopholes in existing law that allow some businesses operating in Nevada to not pay their fair share of taxes to the state.

Assemblyman Don Gustavson, R-Sparks, said Gibbons has put forward a well reasoned plan and deserves credit for doing so.

“I think it is a workable plan if we can get it passed, although the leadership on the other side is not happy with it,” he said. “I think there are quite a few items that they will agree to because we are in trouble.”

Gustavson said he does not support one element: the proposal to use traffic cameras to capture revenue from uninsured motorists. But he acknowledged that he and other lawmakers must now find a way to make up for the $30 million that is proposed to be generated by the program.

Assemblyman James Settelmeyer, R-Gardnerville, said Gibbons does deserve credit for presenting a plan to balance the budget. But the lawmaker said he still has doubts about some of the components, particularly the proposal to close the Nevada State Prison with the accompanying layoff of 136 employees.

“I don’t know if shutting down NSP is going to save us any money,” he said.

Settelmeyer said he also has questions about whether the Department of Corrections has the space elsewhere in the system to accommodate the NSP inmate population.

“A lot of these proposals are extremely painful cuts,” he said. “The question is can we come up with better alternatives, and if so, will the governor alter the proclamation to include our concepts?”

One point is clear, Settelmeyer said: “Don’t bet on a one-day session.”