The industry winners and losers of the Commerce Tax

Daniel Honchariw

The Commerce Tax has treated Nevada industries in a grossly inequitable fashion, according to an analysis of just-released revenue data from the Nevada Department of Taxation.

The below chart illustrates each industry’s share of total Commerce Tax revenues collected over the past two years against that industry’s share of private sector GDP:

The data reveal that certain industries, such as mining, pay only a fraction of their “fair share,” as calculated by their relative contribution to the state’s private sector GDP.

Conversely, industries such as Wholesale Trade and Waste Management pay far more (311 and 264 percent, respectively) than their proportionate share of the state’s economy.

On a nominal basis, the Retail Trade industry was most harmed by the inherent inequity of the Commerce Tax, having overpaid by about $48 million, as illustrated below:

Similarly, the below chart highlights which industries paid significantly less than their proportionate share of the state’s economy:

For Commerce Tax skeptics, this analysis merely reinforces what was commonly understood: That the Commerce Tax ultimately benefits certain industries over others — thus enabling politically-connected industries to effectively lobby against other sectors of the economy.

For complete revenue information regarding which industries overpaid, which underpaid, and the degree to each, see below:

* See https://united-states.reaproject.org/data-tables/gsp-a900n/reports/320000/

** Data provided by Nevada Department of Taxation; available at npri.org

Daniel Honchariw

Daniel Honchariw

Senior Policy Analyst

Daniel Honchariw joined the Nevada Policy Research Institute in May 2016. He focuses mostly on fiscal and education (school choice) issues, and has also published extensively on the abuses of civil asset forfeiture. His work has been featured and/or cited by in-state and national publications including USA Today, The New Yorker, Reason, the Las Vegas Review-Journal, and the Reno Gazette-Journal.

Prior to joining, Daniel had been a lifelong California resident. His experience includes stints with the National Labor Relations Board, multiple financial services firms, and a Tahoe-based ski resort. He is a sports fanatic, political junkie, and chess enthusiast.

Daniel holds a B.S. in Industrial and Labor Relations from Cornell University (’09) and an M.P.A. in Public Management from California State University, Dominguez Hills (’14).