New Gaming Tax Proposed in Nevada; May Dictate Legislative Races
With 2020 being an election season, every state across the US is going to have advertisements and campaigns on full blast as individuals try to gain the votes of residents. In Nevada, a hot topic of debate this year is a new gaming tax proposal. State legislators as well as those looking to take over official spots are trying to appeal to voters the best way they know how. The Nevadans for Fair Gaming Taxes is set up to play a strong role in the 2020 elections.
The Nevadans for Fair Gaming Taxes was submitted by unionized teachers in Las Vegas who want to see a new amendment added to the constitution to increase taxes on the larger casinos in the state. The details of the bill would push taxes up to $315 million annually.
The union has 19,000 teachers in the Clark County school district, with over 320,000 students attending over 350 schools in the region. The proposal would see the education sector benefit from the higher tax rates. A fourth tier would be added to the casino tax system of Nevada, with casinos that earn over $250,000 a moth to pay an additional 9.75% in taxes.
According to John Vellardita, an executive of the union, the licensee would not be affected by the new tax increase. Vellardita pointed out that gambling taxes in the state have not increased since 2003 and the last time a change occurred, a standoff took place involving legislators and school funding.
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The union stated that this proposal is not the only one that they will be proposing. A second option should be revealed this week. The second plan will reportedly bring an additional $1 billion more than the $315 million expected from the first plan.
Existing Tax Structure
In Nevada, the state currently operates via a system with three tiers. The top section pays 6.75% in taxes based on their monthly gross revenues. This amount must surpass $134,000. Casinos that earn between $50,000 and $134,000 will pay 4.5%. Facilities that earn $50,000 or less a month pay 3.5%.
The teacher’s union is proposing a fourth tier be added to the current tax system. For the proposal to pass, the organization needs to submit a petition. The petition must have just under 97,600 verified signatures to move forward. This would see the measure considered in 2021.
The state legislature must approve the initiative via a 2/3 majority. Because it is an election year, we expect that candidates for office in Nevada will be discussing the initiative at length. Officials will want to get a feel for what the public would like to see while also keeping in good favor with casino operators.
It will be interesting to see what the second proposal would entail and if it will be more supported than the first. Details of the next proposal should be revealed in the coming days.