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The Education Initiative


DESCRIPTION OF EFFECT

This statutory initiative proposes to impose a 2-percent margin tax on business entities doing business in Nevada. Exemptions include: natural persons not engaged in business; entities with total revenue of $1,000,000 or less; passive entities; Section 501 (c) organizations.  Margin is the lesser of: (1) 70 percent of entity's total revenue from its entire business; or (2) entity's total revenue from its entire business, minus (at its election) the cost of goods it has sold or amount of compensation it has paid to owners and employees. An entity's taxable margin, against which the tax is imposed, is that part of its margin apportioned to Nevada.  Revenues from the tax would be deposited in 2-percent modified business tax now paid by financial institutions would temporarily be increased to 2.29 percent, and potentially to 2.42 percent, to provide money for the Department of Taxation to begin to administer the margin tax. Liability for the margin tax would begin to accrue on January 1, 2014, if the initiative is approved by the Legislature, or January 1, 2015, if approved by voters.

What is the Education Initiative?
It is an initiative sponsored by the Nevada State Education Association and the Nevada State AFL-CIO.  It is anticipated to bring substantial funding for Nevada’s K-12 public schools.

How will the Education Initiative become a reality?
TEI will be on the ballot in 2014.

Who supports the Education Initiative?
Teachers and support professionals are highly supported by Nevadans in general.  It is in everyone’s best interest for our schools to be adequately funded.  We know that businesses support the Education Initiative as well as other labor groups and community stakeholders with a vested interest in an education workforce.

How does the Education Initiative raise money for our schools?
The Education Initiative would impose a 2% margin tax on business revenue. Businesses that earn $1 million or less will be exempt. 

What can I do?
Visit www.TEINevada.com today and sign up for information and to volunteer. We need every NSEA member to be the voice of education funding in Nevada. You can stay involved and connected by following TEI on Twitter @edinitiativenv. Follow NSEA on Facebook www.facebook.com/nseanv. Like our page and share TEI facts and pictures that we post. Help us tell everyone that it’s time to tax businesses to help our schools.

What is a Margin Tax?
The Education Initiative would impose a 2% margin tax on business revenue. The margin is either: An entity’s total revenue minus salaries or cost of goods, or simply, 70% of its total revenue, whichever is less, and an entity is only taxed on the percentage of the margin that represents its Nevada business. Businesses that earn $1 million or less will be exempt. The funds raised through the Education Initiative will go directly to the Distributive Schools Account—the education budget—in the state’s general fund. 

Why should Nevada’s businesses pay for our schools?
Education is everyone’s responsibility.  Businesses benefit from a qualified, educated workforce, yet they do not pay their fair share.  At a critical time in Nevada’s economy, it is imperative big businesses invest in K-12 education to ensure our economy turns around and improves. 

What will the money be used for?
Funds raised through the Education Initiative will go directly to the Distributive Schools Account—the education budget—in the state’s general fund. This funding can be used to reduce class sizes, more tools and technology, early childhood education, a safe and supportive learning environment, and the ability to attract and retain quality educators. 


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