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New Nevada Legislation
The payroll tax that the Nevada Legislature enacted
into law last year is an annoyance to some big employers but a disaster
for some small ones.
Companies affected by the new tax range from an
independent banker who worries about having to shut down branches in
small towns to a large casino operator who considers the tax a
disincentive to hiring new workers. Among others who will be hit by the
tax include a woman who hired people to take care of her invalid mother
at home.
The first quarterly tax bill under the law, which
imposes a tax on companies’ total payroll budgets, was due Jan. 31, and
many businesses are already smarting.
But few are as angry as bankers.
The payroll tax imposes 2 percent taxes on bank
employee wages, with a dollar-for-dollar credit for any medical
insurance expenses provided to employees. Banks are also paying a new
$7,000 annual fee for each Nevada branch after the first one.
That’s more than three times the tax on businesses
that are not classified as financial institutions. All other businesses
pay a 0.7 percent tax on employee payrolls, although the rate will drop
to 0.65 percent Aug. 1. Businesses also can deduct the cost of medical
insurance benefits provided to employees.
Casinos also pay the new payroll tax, plus a 6.75
percent tax on gross gaming revenue, up half a percentage point as a
result of legislation last year.
One of the hardest-hit banks is Nevada Bank and
Trust Co. It serves some of the state’s smallest, most remote cities:
Carlin, Pioche, Alamo, Elko, West Wendover, Ely and its home town of
Caliente. Nevada Bank dates from 1978 and has $70 million in deposits,
making it one of the smallest banks in Nevada.
Nevada Bank Chief Executive Officer Barry Smith
said the new tax will cost his bank about $90,000 a year. He worries
about being forced to lay off some employees and close branches.
"It’s not something that the bank is looking to do.
It is something that it may have to do," Smith said. "We have to look at
the impact.
Read the
entire article at:
The Las Vegas Review Journal
2004 Online Casino News Archive
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