In a nutshell: The Legislature passed a law to tax casinos on free meals they provide to their employees and their customers. The state has been collecting this tax since around 1981. But some casino companies have been fighting the tax all along and sued to stop it. And they won. So the government can’t collect this revenue any longer.
But Gov. Jim Gibbons announced yesterday that his office intends to continue the legal fight to keep this tax in place. “The governor believes the Legislature intended to tax these transactions, and as they have always been taxed in the past,” Ben Kieckhefer, the governor’s spokesman, told the Las Vegas Sun yesterday. “At a time when the state is struggling fiscally, it’s important to maximize the revenues we have.”
According to the Sun report, casino lobbyists consider this a tax increase. Kieckhefer disagrees. “It’s a tax that has been collected all along,” he said. “To call it a tax increase is political positioning.” And Carole Vilardo of the Nevada Taxpayers Association seconds that emotion: “To say that it was a new tax, or a tax increase, I have a problem with. It’s a game of semantics played too frequently.”
Let’s clear this up so there’s no misunderstanding.
If the Governor wishes to continue legal arguments to maintain the existing tax, fine. Personally, I hope he loses; however, pursuing legal action to retain an existing tax is not a violation of the Taxpayer Protection Pledge. This is not “an effort to increase taxes.” It’s an effort to retain an existing tax.
However…
Once the legal arguments are exhausted, and if the courts continue to say the tax is illegal and can’t be collected, any FUTURE effort to RE-impose the tax once the courts have killed it WOULD be “an effort to increase taxes.” So the governor would then be obligated by the Taxpayer Protection Pledge to veto any such effort.
In any event, how in the heck can you justify taxing free food? You may as well tax the air we breathe.
Yikes! Better not give ‘em any ideas.
Posted on July 31st, 2008 by Chuck Muth
Filed under: Nevada
How much money is it costing the taxpayers to fund this legal action? For a state that is in a budget crisis, it seems like the money spent fighting this could be better used somewhere else or placed in the empty “rainy day” fund.
What if it is decided that the Courts ought to have no day in the argument, and that the Legislature intended for the tax to be in place? It seems to be me that we argue that the Courts are activists, and that they should stay out of the business of legislation, until they decide the way we like. I say the Nevada Supreme Court never ought to have entered into the debate to begin with. Let the Legislature be the judge, pardon the pun, of this debate. If they determine that the tax never ought to have been colltect, so be it. In the counter, if they determine that it was their intent — and who better to determine than the men and women who passed the legilsation to begin with — that the tax be collected, then so be it as well. It seems rather unfair, I think, to say that because of the decison of a court that there needs to be a tax-payer violation at all. I would argue that the violation would occur if the legislature determined that no tax ought to be have colleccted, but then when about trying to pass a tax anyway. What say you, Mr. Muth?