Nevada Legislative Wrap Up - 2009

For business owners in Nevada, Black Friday came on Wednesday, July 1, 2009.  That is when Nevadans were hit with the tax "enhancements" passed in the waning days of the 2009 legislative session.  While legislators congratulated each other for "making the tough decisions," Nevadans braced for the impact of the record setting $1 billion dollar tax increase-all in the middle of the most severe economic downturn since the Great Depression and while Nevada's unemployment rate reached 10.6%.

What's new in taxes for Nevadans?  The sales tax was increased by .35%, raising the rate to 8.10% in Clark County.  The Modified Business Tax (MBT), Nevada's payroll tax which was .63% of every businesses' total payroll, was split into two tiers: .50% on the first $250,000 of annual payroll and 1.17% on everything over $250,000.  That will result in an annual reduction from $1,675 to $1,450 for an estimated 74% of businesses in the State, those with four to five persons on payroll.  However, the other 26% of businesses will see an average increase of 80%.  Sadly, the $225 savings in MBT tax for small businesses will likely be wiped out by the sales tax increase.

The State business license fee was doubled from $100 to $200 per year.  The legislature also "enhanced" tax revenue imperceptibly by modifying the DMV's depreciation rate used for calculating the government services tax on vehicles.  Hotel room taxes were raised another three percent.  Not to be outdone by the state, the federal government minimum wage increase went into effect on July 1 as well.  Nevada's wage rates went from $5.85 to $6.55, for businesses paying for health benefits, and from $6.85 to $7.55 for those not paying health benefits.  The taxes are to sunset in 2011.  Whether they do or not is another thing.