Mom-and-pop business worries about indirect impacts of margin tax


MARGIN MANIA: Local business owners are worried about tax policy hurting their business.

By Chantal Lovell |

Randy and Kathalynn Thwing may have to pick up their lives and move out of the state they’ve called home since the ‘80s if Nevada voters approve the margin tax this November, even though their long-time business wouldn’t be directly subjected to the tax.

The pair owns and operates New Standard Manufacturing, a business that’s been building and selling padlocks in Nevada for more than 25 years. Even though they’re one of the small, mom-and-pop businesses supporters of the tax claim will be unaffected, Randy said his business and other companies like them will be hit hard.

“It’s the simplest economics,” Randy said, recognizing that those he does business with will pass on the tax to him, thereby upping his costs of operating in the Silver State. “My landlord is the biggest example. They’re a multi-million-dollar company. They’re going to raise my rent 2 percent.”

If the tax passes, businesses that bring in more than $1 million in revenue in a given year will be forced to pay a 2 percent tax on that revenue — minus certain deductions — regardless of their profitability. Even companies that lose money would be forced to pay if they meet the $1 million threshold.

“A small business like mine, that’s not going to pay the tax (directly), what’s my share of the tax going to be?” he wondered. “It’s a trickle-down sort of thing.”

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