Preview: The 2023 Nevada Legislative Session
The Nevada Legislature convened its 82nd regular session on Monday, February 6, 2023, beginning a four-month legislative session that will determine the state’s budget for the next two years and to consider a multitude of changes to Nevada law. At the time of writing this article, there are nearly 250 proposed bills and resolutions. There are also several hundred additional bill draft requests for the Legislature’s consideration, so the number of proposed bills will certainly increase as the session moves forward. With Republican Governor Lombardo, a Democrat-majority Legislature, and Republican Lt. Governor Stavros Anthony having the tiebreak vote in Nevada’s Senate, there will undoubtedly be tough and impactful negotiations on various priorities. Below are some of the issues that may influence Nevada’s businesses.
Tax Policy
Two of Nevada’s most controversial business tax laws, the Modified Business Tax and Commerce Tax, are squarely within Governor Lombardo’s crosshairs. The Governor’s budget proposal seeks to lower the modified business tax rate by 15 percent to 1.17 percent and seeks to raise the exemption for businesses subject to the Commerce Tax from $4 million to $6 million. These two changes, alone, would have a substantial impact on Nevada’s businesses at a time of economic uncertainty. Governor Lombardo also proposed a twelve-month suspension in Nevada’s motor vehicle fuel tax, a 23 cent-per-gallon tax, which could yield significant savings for businesses and individuals.
Licensing and Regulations
Seeking to return Nevada to its prior status as one of the most business-friendly states in the country, Governor Lombardo issued two executive orders that will likely result in significant changes to the way Nevada’s businesses are regulated.
Executive Order 2023-003 freezes all executive branch agencies, departments, boards, and commissions from issuing any new regulations and ordered internal reviews of its regulations, with a requirement to provide a list of 10 regulations recommended for removal by May 1, 2023.
Executive Order 2023-004 directs all Nevada occupational and professional licensing boards to suspend any new regulations, develop a plan for licensing reciprocity under certain conditions by July 1, 2023, and to prepare a report detailing all current regulations that restrict entry into any occupation or profession regulated by that board by April 1, 2023.
There will likely be corresponding proposed legislation addressing these issues, many of which may materialize after the deadlines imposed by the two executive orders.
Cannabis
While the cannabis industry is sure to see several proposed bills that may impact their business operations, there are four key bills that will likely be considered. The first is a bill seeking to lower cannabis wholesale taxes for cultivation licensees that would remove the excise tax on wholesale transactions and shift the excise tax to retail licensees. The second would permit mobile cannabis sales through a new “portable vendor license”. The third would double the daily THC purchase limits from 1 ounce to 2 ounces. The fourth would allow a licensed dispensary to relocate to a different jurisdiction under certain circumstances.
Real Estate
Senate Bill 68 seeks to raise Nevada’s property transfer tax by 20 cents for each $500 of value for each property sold. In Clark County, it is estimated that this increase would yield between $7 million and $8 million per year from this increase, mostly from individuals and small business. However, many of Clark County’s largest property transfers—often sales of large casinos—avoid paying any property transfer taxes by using an exemption of the transfer tax when property is acquired through a purchase of a real estate holding company or by transferring real estate into a subsidiary. Nevada’s Legislature has not signaled a willingness to address this exemption.
Conclusion
Our Government Affairs team remains engaged during this legislative session on behalf of its clients and all Nevada businesses to help ensure that Nevada moves forward in a business-friendly direction. If you have any questions regarding existing legislation, or if you would like to learn about ways you can get involved with the legislative process, please contact our team.
About Holley Driggs
Holley Driggs is proud to be a Nevada-based law firm focused on making positive contributions to their local and regional communities through the dedicated leadership of its team of more than thirty experienced attorneys. With offices in Las Vegas and Reno, the general practice law firm represents national and international clients on a wide spectrum of business and corporate practice areas including commercial litigation, real estate, natural resources, eminent domain, employment law, bankruptcy, construction, gaming, and technology and intellectual property. The Firm’s shareholders also have broad experience in administrative law, estate planning, probate, and tax law. For more information, please visit www.nevadafirm.com or call (702) 791-0308 for the southern Nevada location or (775) 851-8700 for the northern Nevada location.
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