By Sean Whaley | Nevada News Bureau
LAS VEGAS – Attorneys for the teachers association and state business interests faced off before the Nevada Supreme Court on Wednesday over whether a proposed margins tax initiative petition has met legal requirements and so should be submitted to the 2013 Legislature.
A Carson City district court judge earlier this year said the petition filed by the Nevada State Education Association to establish a 2-percent tax on companies making gross revenues in excess of $1 million a year was invalid because the 200 word “description of effect” was incomplete. It did not specify how much revenue the tax would generate, said Judge James Wilson in a ruling in October.
A group called The Committee to Protect Nevada Jobs challenged the petition. The teachers association appealed to the Nevada Supreme Court, which Wednesday heard oral arguments in the dispute. The court will rule later on the matter.
Despite the lower court ruling, the association last month turned in 152,000 signatures, more than double the required number to qualify the petition for consideration by the Legislature.
If the petition is found by the court to have satisfied state legal requirements, the Nevada Legislature will be required to take up the proposal when it convenes in February. The Legislature would then have 40 days to approve the proposal or it would go to the voters in 2014.
The proposed Texas-style margins tax would raise an estimated $800 million a year for public education.
Justice Ron Parraguirre asked whether it is a material effect that a business could face a loss and still be required to pay the tax.
“Isn’t that a material effect that ought to be disclosed?” he said.