Monday, May 07, 2007

Nevada Legislature Passes Bill To Seize Profits From Businesses

I have done a couple of shows about this bill since it was first proposed, and people are very upset that socialism is taking over Nevada's usually business friendly atmosphere. The bill allows the state of Nevada to "keep" the money from unused gift cards, and other items as well.

Review Journal:

Sixty percent of the value of unused gift cards given Nevadans would be forwarded to state government for support of public schools under a bill unanimously approved Friday by a Senate committee.

The Senate Judiciary Committee approved Assembly Bill 279, but not before tacking on an amendment sought by the Retail Association of Nevada.

Under the amendment, the issuer of expired, unused gift cards or certificates can keep 40 percent of the value. The remaining 60 percent would go to state government and be earmarked for education.

You'll notice that the legislature settled for only 60% of the profits while the businesses that the transaction originated from only get 40%. The legislature was seeking 100% of the dollar amount from unused gift cards.

Assemblyman Ruben Kihuen, D-Las Vegas, was the primary sponsor of the bill which passed the Assembly 41-1. He has been citing the new Texas legislation on a nearly non-stop basis. Texas hasn't even collected any of these funds yet, but has released how much they "may" make.

Of course, Kihuen used education as the major selling point, but education funds will not change at all with this legislation. No matter how much money is seized from legitimate businesses from this bill ... they will simply defund education by that amount to balance it.

Last year about $8 billion went unclaimed on gift cards. Depending on the expiration date on the cards ... much of that ends up being a profit for the issuing company. Some companies like Wal-Mart don't have an expiration date, and you are always free to use the card whenever you want ... not anymore in Nevada. Now you have three years to use the gift cards, or Nevada takes the funds away.

There has always been complaints of companies charging a monthly fee for the amount on the cards, etc. This, however, goes way beyond that poor practice. This is blatant government theft. Not just from the customer, but the company itself. Nevada is issuing a tax without any representation upon businesses and consumers.

The consumer has already been taxed on the funds they used to purchase the gift card, then there is the sales tax for the amount on the gift card, and the business has already been taxed on the amount of revenue it takes in. This is, at best, a quartet of taxation.

The state of Nevada has had nothing to do with these transactions whatsoever. There were no state efforts to make the transaction possible, but the state believes that it is entitled to the funds of a legal, legitimate business transaction of which it was not involved. Maybe it's for the pleasure of doing business in Nevada.

What was Nevada's justification for this socialist endeavor?

"If the company is incorporated in Delaware, the remaining balance goes to Delaware," Kihuen said. "It only makes sense if the card was purchased here, it should stay in Nevada. We can generate much needed revenue for education without raising taxes or fees."

Clearly this IS a fee/tax. So it's ok to steal money from a company because the funds may leave Nevada and go to another state? Are we now going to seize a percentage of all consumer transactions that happen in Nevada with companies who have their corporate headquarters in another state? Where's the incentive for companies to open a local branch in Nevada?

Kihuen and his cohorts are trying to argue that this is no different than the Uniform Unclaimed Property Act, but that is a lie. These gift cards aren't unclaimed, or abandoned, they are unused. Last I checked ... a house that is not being used but whose owner is still making the payments on is not unclaimed property ... it belongs to the owner and not the state.

Surely this is just a Democrat ploy to tax without taxing ... right?

Judiciary Chairman Mark Amodei, R-Carson City, supported the bill, but expressed concern that companies issuing unredeemed gift cards were being allowed to keep too much money.

"Forty percent is a heck of a deal," he said.

That disspicable bastard! He actually thinks it's a "hell of a deal" for the business to keep just 40% of the revenue from its own transaction? He thinks Nevada is being too nice by only keeping 60% of the revenue for a transaction of which they had no part!

If our founding fathers were to see that the government was taking money away from a business just because the business sold an item to a customer, and the customer wasn't using said item, they'd call it what it was ... stealing. If I purchased a radio from Best Buy and didn't use it for three years ... can the state of Nevada come take it away, auction it off, and keep the money for themselves? Why not ... there's no difference.

I'm no lawyer, but I know damn well there is some violation of interstate commerce laws here. You can't have a state seizing funds from a company just because they don't want that company to send those funds to their headquarters in another state.


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