Zappos officer testifies for business tax plan

CARSON CITY -- The chief financial officer for online shoe seller Zappos.com testified Monday in favor of a proposed business tax in Nevada, even if it increases the company's overall tax bill.

Chris Nielsen, CFO at the company which employs about 1,200 people in Southern Nevada, told members of the Senate Revenue Committee he supports the idea of the so-called margin tax backers say would give the state a more stable source of revenue than the existing modified business tax.

"Just as we're focused on customers we're also focused on doing the right thing for our employees," said Nielsen, who added many of the company's Nevada employees are concerned about the quality of education in the state.

The margin tax is part of a Democratic plan to increase taxes by about $571 million and postpone the expiration date on another $626 million in existing taxes to raise money for education and social services. The margin tax and postponement of the expiration of the other taxes are included in Senate Bill 491.

Another Democratic bill, Assembly Bill 569, includes a proposal to add a 1 percent service or "transaction" tax that would apply to just about every service imaginable, from haircuts to accountants to plumbers and gardeners.

Nielsen said Zappos moved from California to Nevada in 2004 in part because of Nevada's lower taxes. But he said the proposed 0.8 percent margin tax wouldn't significantly change Nevada's low tax environment or discourage the company form expanding.

"We expect to continue to grow the business over time and SB491 won't have any bearing on that," he said.

Democrats are seeking business support for the proposed taxes in an effort to attract Republican backers to reach the two-thirds majority needed to pass the bills.

So far, Republican lawmakers have stuck with the anti-tax position of Republican Gov. Brian Sandoval whose proposed $6.1 billion general fund budget contains major cuts to state spending on education and social services.

Democrats are pushing a budget proposal that would spend about $7 billion.

The 120-day legislative session is set to conclude June 6, leaving Democrats with little time to win support from the three Senate and two Assembly Republicans they would need to override a Sandoval veto of tax increases.

Since introducing the tax plans earlier this month, Democrats have been working six days a week from early morning into the evening to hold hearings aimed at highlighting support for their vision.

"We'll keep meeting until everyone has a chance to say what they want to say," said Sen. Sheila Leslie, D-Reno.

Contact Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.