We encourage you to vote NO on Question #3, the Margin Tax Initiative. There is much misinformation floating around - the most frustrating being that this tax will only impact large businesses. Weve actually read the initiative, and heres the summary: If a business generates gross revenue of $1 million or more, they become subject to the tax. The tax is calculated one of three ways, 1) 70% of total revenue x 2% tax; 2) Total revenue less cost of goods sold x 2% tax, or 3) Total revenue less salaries and wages x 2% tax. Here is a margin tax calculation based on a business for whom we prepare taxes. Its a service-based business with 7 employees and they gross $1.1 million. They have $400,000 in salaries and wages, but no real cost of goods as they are service-based. Their taxes will be the lower of 70% x $1.1 million x 2% = $15,400 or $1.1 million less $400,000 = $700,000 x 2% = 14,000. Their net income is $120,000 per year so the calculated margin tax would be the equivalent of an11.7% net income tax. They would be better off moving to California, where the maximum corporate tax is 8.84% on net income. This tax would be a tremendous hardship on small businesses - many of whom are just seeing their business rebound after years of economic adversity. This tax could prevent small businesses from creating new jobs - and could potentially create a need for job reduction in some businesses. This tax may also discourage businesses from relocating to Nevada meaning less growth in the economy. We are very much in favor of of finding a solution to the deficit in education funding, but this is not the way to do it.
Posted on: Wed, 29 Oct 2014 18:07:55 +0000
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