Multistate Tax Alert: Nevada “Margin Tax” Proposed to Fund Education
In an effort to fund education, a labor coalition has filed an initiative with the Nevada Secretary of State, proposing the enactment of a state-level margin tax. The proposed tax would apply to businesses that take in more than $1 million in gross revenue. If enacted, the tax would be imposed at a rate of 2 percent on a base (taxable margin) calculated on the lesser of: (1) 70 percent of total revenue, or (2) total revenue minus the cost of goods sold or compensation. To put the proposal before the 2013 Nevada Legislature, supporters are required to collect 73,000 signatures. If the proposal makes it to the Legislature and if legislators reject it or fail to act, it would go before voters in 2014. Liability for the tax would begin to accrue on January 1, 2014, if the initiative is approved by the Legislature; or on January 1, 2015, if approved by voters.
For more on this proposed Nevada law change, please see the attached Tax Alert.