The special session is over. Taxes weren’t raised. Taxpayers win. The budget was balanced without sucking any more money out of the pockets of Nevadans or Nevada’s tourists. Not that some legislators didn’t try.
The stumbling block yesterday was a contested tax on employee meals and meals “comped” to guests by casinos. A 1979 law imposes a “use” tax on such meals - as you can’t impose a sales tax on something which isn’t, you know, sold. Casino and other employers have been paying this tax for years, but under protest. A lawsuit was filed challenging the tax. A district court ruled the tax was valid, but the state Supreme Court ruled a few months back that is wasn’t - which meant the state had to refund the money casinos have been paying. However, the Supreme Court has since decided to reconsider the case.
So this is a legal case still unresolved and the worst thing the Legislature could have done yesterday was stick its nose into it. Which, of course, is exactly what it did.
Assembly Bill 2 of the special session would have reaffirmed the Legislature’s position that employee meals should be taxed. Now, since the Supreme Court’s current position is that such a tax is dead, any effort to reimpose it could, in fact, be considered a tax INCREASE. On the other hand, since the tax already exists and the Supremes are reconsidering their position, passing a bill reaffirming the tax could be construed as merely retaining the status quo.
It was a confusing and difficult issue which never should have been brought up in the special session in the first place. Thankfully, Senate Majority Leader Bill Raggio and Senate Republicans killed it…for now. But I suspect the issue is going to come up again in the 2009 session.
Posted on June 28th, 2008 by Chuck Muth
Filed under: Nevada
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