Nevada Governor Joe Lombardo is calling for a gas tax holiday for Nevadans through his proposal of Senate Bill 502, scheduled for a hearing Tuesday in the Senate Revenue and Economic Development Committee. If passed, gas taxes would be suspended through the 2023-2024 fiscal year. 

Gov. Lombardo laid out his plan in January, during his first State of the State address, saying:

Today, the government has more money than we can responsibly spend; households and businesses most certainly do not. Look around. Everything is more expensive these days: groceries, supplies, and services.

Working with local gas station operators, the petroleum industry, and the Attorney General’s Consumer Affairs Division, we will make certain that these savings exclusively benefit taxpayers. Using our budget surplus to provide tax relief won’t negatively affect our fuel-tax-funded road and construction program or impair bonds.

Nevada has the sixth highest gas taxes in the country. Currently, the average gas price in the US is $3.54 per gallon, while in Nevada the average gas price is $4.21, the fifth highest in the nation. 

Nevadans deserve relief from the pain at the pump.

Let’s get to work on delivering this tax break for Nevada families. https://t.co/WGDsgrXg6B

— Governor Joe Lombardo (@JosephMLombardo) May 23, 2023

In the summer of last year, the proposed federal relief on gas taxes would not trickle down to Nevada consumers because state law automatically raises the tax when the federal rate drops. In June of last year, Nevada became the state with the second highest gas prices, at $5.49, 63 cents above the national average at the time and only behind California, of course. 

Lombardo’s plan will not affect federal tax. If enacted, SB 502 would waive a 17.65 cent per gallon state excise tax.

Surplus Spending

The bill was introduced on Monday and makes good on Lombardo’s commitments in January to continue to fund road construction by appropriating $250,000,000 from the State General Fund to the State Highway Fund. Nevada has a budget surplus of around $2 billion dollars. 

There has been contentious debate across the party lines on how to allocate the surplus funds and a closely watched possibility that the governor will veto a state budget if it is not satisfactory, ushering in a special legislative session. On the issue of surplus spending, Lombardo has been clear that the state has the opportunity to make one-time investments, to help as many Nevadans as possible in lieu of creating new programs that aren’t sustainable.

Earlier this month, after Democrat leadership held a “no compromise” media event outside the statehouse, Lombardo said:

That is also one-time money. That’s the problem. You talk about programs that have the inability [to] sustain in the long term, and that hasn’t been defined. They haven’t given a plan that says it’s going to be able to sustain. It’s feel-good political filter. Granted, you want to help as many people as you can, that’s the role of government, but you also have to manage it. And that’s what I’m failing to see from the other side of the aisle.

Commerce Tax

The governor’s sponsored legislation would also make changes to the state commerce tax, alleviating taxation burdens on businesses by permanently raising the threshold from $4 million to $6 million in gross revenue.

The commerce tax was passed in the 2015 legislative session, under former NV Governor Brian Sandoval, a Republican, while Republicans controlled both legislative chambers. This came after a red wave election in 2014, the first time since 1929 that the governor and legislative majority leaders were all Republicans. When the largest tax increase in state history was levied under GOP control, many conservatives revolted at the ballot box. In the 2016 election, Republicans lost their one-seat majority in the Senate, and Democrats picked up 10 seats in the Assembly, breaking the Republican-held trifecta. The truth is Republicans have never controlled the state since. 

Lombardo’s move to permanently decrease the threshold of the commerce tax is not just fiscal relief for local businesses, it holds symbolic underpinnings for aggrieved Republicans that felt betrayed and haven’t had much representation since 2016. 

While the final weeks of the legislative session have been a wrestling match with Democratic-majority leaders sandbagging the governor’s proposals, a gas tax holiday helps all motorists in our state and Nevadans are hoping to see this bill hit Lombardo’s desk.