Nevada Resort Association sues to block tax initiative

CARSON CITY — A trade group representing Nevada hotels and casinos has moved to block a ballot initiative that would raise the tax rate on the state’s biggest-earning casinos, claiming disqualifying technical errors in the petition backers submitted to the state.

The Nevada Resort Association filed a lawsuit Tuesday in Carson City District Court.

In court papers, it said that the petition filed with the secretary of state’s office cites an incorrect effective date that could “mislead voters” and “create legal uncertainty related to implementation.”

The gaming tax initiative put forward by the Clark County teacher’s union last month aims to raise more than $300 million per year in new state general fund revenue.

The resort group’s second legal claim alleges that the measure has been promoted as a way to raise state education funding.

But the complaint said the measure “fails to tell voters that these additional fees will not go to fund education” but instead to the state’s general fund, according to the lawsuit.

If the measure is approved, either by the Legislature or by voters, it would create a new top tier to the state’s gaming tax, placing a levy of 9.75 percent on all establishments with a monthly gross revenue of more than $250,000.

The existing three-tiered tax tops out at 6.75 percent on monthly gross revenue over $134,000.

Tax rates for smaller establishments range from 3.5 percent on gross revenue of up to $50,000 per month and 4.5 percent on gross revenue between $50,000 and $134,000.

It is one of two ballot initiatives submitted last month by political action groups formed by the Clark County Education Association. The second would raise a component of the state sales tax dedicated to school funding from 2.6 percent to 4.1 percent, potentially raising $1 billion annually.

Both are statutory ballot initiatives. Supporters have until November to gather about 98,000 signatures to send the measures initially to the Legislature in the 2021 session. If lawmakers reject them or fail to act, they would appear on the state ballot in 2022.

Clark County Education Association Executive Director John Vellardita said Tuesday the NRA’s legal challenge to the gaming tax initiative was “no surprise.”

“There’s a lot at stake for them,” he said. “We know where the public is on the issue. We’re confident this is going to be on the ballot in 2022.”

In a statement, the resort association said it has supported broad-based taxes but opposes a tax targeting only its industry.

“To be very clear, the gaming industry has consistently supported a broad-based business tax to support public education and has a long history of investing in Nevada’s classrooms,” the statement reads. “Broad-based taxes are a sound and stable approach rather than the volatility that comes with taxing a single industry. We look forward to working with the governor, legislative leaders and other stakeholders to improve education.”

Contact Bill Dentzer at bdentzer@reviewjournal.com or 775-461-0661. Follow @DentzerNews on Twitter.