CARSON CITY — A group led by Republican Controller Ron Knecht has filed a petition seeking to repeal a new Nevada business tax backed by Republican Gov. Brian Sandoval and more than two-thirds of the Legislature.
A political action committee called RIP Commerce Tax, Inc. filed a petition with the Nevada Secretary of State on Thursday to repeal the commerce tax. Supporters need to gather about 55,000 signatures statewide to put the measure on the ballot next year, something they intend to begin if the measure survives any court challenges that must be filed within the next two weeks.
"This thing will gather so much momentum as it goes," said Knecht, the president of the PAC. "I expect if we get to the ballot, we win, and we win convincingly."
Other officers in the PAC include conservative Las Vegas City Councilman Bob Beers and former Nevada Assemblyman Ed Goedhart, who represented several rural counties.
The tax applies to the gross revenue of businesses that make more than $4 million from Nevada each year. It was part of a three-pronged bill passed this spring that was aimed at providing more funding for schools, but opponents say it goes against the will of voters who overwhelmingly rejected a margins tax ballot measure last fall.
Knecht said people shouldn't miss the commerce tax, which is expected to generate $120 million over the next two years, and said lawmakers could find places to cut the budget when they reconvene in spring 2017. The tax is a relatively small part of the overall, $7.4 billion two-year budget, although opponents say they fear the Legislature will raise the rates in the future.
If the measure qualifies for the ballot and prevails, the tax will be repealed. If it qualifies for the ballot but fails, the tax is locked in place and can't be changed without another statewide referendum — an outcome that would block the Legislature from adjusting the rates or tweaking the rules surrounding it.
Legal challenges to the petition must be filed in district court by Oct. 29, Knecht said.
A separate effort to repeal all three parts of the $1.1 billion tax package is caught up in the courts. Judge James Todd Russell decided earlier this month to dismiss the petition from anti-tax activist Chuck Muth, saying its broad scope violated the state's single-subject rule for ballot measures and decrying an effort to move the measure out of state courts and into the federal court system.
Sandoval has spoken out against repealing all or part of the tax package, which he worked to usher through the Republican-backed Legislature against great odds.
"Controller Ron Knecht, and others who are responsible for promoting this petition, owe it to Nevadans to explain exactly what education programs they will cut if this measure passes," the governor said in a statement, pointing to an influx of new money the tax package is providing for literacy programs, all-day kindergarten and gifted and talented education. "Its passage will destroy a generational opportunity to finally modernize and improve an underperforming education system."
Sun reporter Cy Ryan contributed to this report.
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