Tax hikes are not popular. So what to do if you are a state legislator trying to shove through costly tax increases? For Nevada legislators, the answer was to avoid public scrutiny with a total lack of transparency, shoving bills through with little review over Memorial Day weekend.
The state’s legislative session ended with unnecessary mining tax increases, along with a bill that would permit local governments to collect lodging taxes from short-term rental businesses like Airbnb.
A few Republicans in the Democrat-controlled Nevada Legislature went along with inflicting new taxes on gold and silver mining operations by passing Assembly Bill 495. Democrats needed a two-thirds majority to push these levies, per the Nevada constitution. Assemblyman Tom Roberts, R-Las Vegas, and Assemblywoman Jill Tolles, R-Reno, voted with the Democratic majority, moving the bill on to the Senate.
Silver and gold mines that report gross revenue of $20 million to $150 million will be charged 0.75% excise tax, while a 1.1% tax will be charged on mines that report any higher. The plan is expected to cost $88 million a year in new tax burdens, with the revenue marked for education. Gov. Steve Sisolak called the tax hike “one of the most significant steps our state could take on our road to recovery.” Yet, most advocates in the state say that almost $1 billion is needed to adequately address public school funding, which indicates more tax hikes may be coming. These tax hikes are completely unnecessary even from a big spending perspective. Nevada came out of the pandemic flush with billions in federal bailout cash. For context, Nevada’s entire budget is $4.5 billion. So a tax increase to yield $88 million in just a year seems like an unnecessary initiative by Democrats in the Mining State.
Another bad bill that passed will impose damaging restrictions on short-term rental properties. Assembly Bill 363 will apply to the most populous counties and cities in Nevada and will add restrictions to how short-term rentals operate.
As ATR wrote in a letter to legislators:
“AB 363 is the opposite of free market policy, it instead places onerous rules on short-term rentals that make a mockery of property rights, and make it difficult for many to operate.
“In particular, rules requiring a 500 ft. minimum distance between units, and rules requiring a 2500 ft. distance from existing hotels, would clearly force many hosts to stop offering their properties. This would have a harsh effect on these hosts’ income, and take away options for travelers, ultimately this would also hurt tourism activity in the state.”
Higher taxes, and absurd regulations that ignore property rights, not the way for Nevada to close out their bi-annual session. Families and businesses are watching the state go in the wrong direction by increasing burdens and following the lead of states like California, rather than sticking with the pro-taxpayer policies that have helped the state grow.