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Nevada Supreme Court Upholds Tax Initiative

"Given the 200-word limit imposed on these descriptions, they cannot constitutionally be required to explain every detail or effect that an initiative may have," the opinion said. "This is especially true where, as here, the actual text of the initiative is 25 pages in length.

"To reach a different conclusion would significantly hinder the people's power to legislate by initiative and effectively bar all but the simplest ballot measures."

The proposal seeks to impose a 2 percent margins tax on businesses grossing more than $1 million. Backers have said it would raise $800 million a year and the petition says those taxes would be earmarked for the Distributive School Account, used for per-pupil funding.

Peck said the goal is to fix Nevada's "broken tax structure" and provide a stable revenue stream for K-12 education "to give every kid an opportunity to learn."

LaGatta countered it would impose a tax burden on businesses still struggling in the wake of the Great Recession in a state that has led the nation in unemployment since May 2010.

"Since this tax applies even to businesses that are losing money, we greatly fear that the application of this tax will cause even more businesses to close and cause even more Nevadans to lose their jobs," he said.

The initiative is based on a similar measure floated by Democrats late in the 2011 session that died for lack of support.

Supporters gathered about 150,000 signatures â¿¿ more than twice the number needed â¿¿ to keep the measure alive and send it to the Legislature that convenes Monday. Lawmakers have 40 days to act. If they reject it or take no action, it automatically goes to voters in November 2014.

Legislators could also come up with their own alternative proposal to appear on next year's ballot.

"Now that the court has ruled, we certainly hope and expect that the Legislature will support and enact the initiative," Peck said. "If they come up with an alternative, we hope it is a real fix and not just another Band-Aid solution."

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