How federal policies are impacting small businesses in Nevada, that's this week on Nevada Week.

♪♪♪ Support for Nevada Week is provided by Senator William H. Hernstadt.

-Welcome to Nevada Week.

I'm Amber Renee Dixon.

According to the U.S. Small Business Administration Office of Advocacy, more than 99% of Nevada businesses are small businesses.

And right now, taxes, tariffs, and immigration are federal policies that some of them are struggling to navigate.

The Tax Cuts and Jobs Act, or the TCJA, for example, is set to expire at the end of this year.

President Trump signed it into law in 2017 and wants Congress to extend several of its provisions.

But how do small businesses feel?

For that, we bring in our panel of experts: Winnie Dowling, State Director of the Nevada Small Business Development Center; Shandell Newsome, Founder of Sumnu Marketing and Former Board Chairman at the Urban Chamber of Commerce; Mary Beth Sewald, President and CEO of the Vegas Chamber; and Luiz Oliveira, Founder of Sambalatte.

Thank you all for joining us.

-Thank you.

-I want to start with the small business owners at this table.

Shandell, you first, and then Luiz.

How is the TCJA impacting your small business?

(Shandell Newsome) Well, thank you, Amber, for that question, because small business owners look at the tax code.

And the TCJA, in particular, that one, there's some expiring tax codes, so how do we prepare for that?

We're also really always overwhelmed by the administrative duties when it comes to that.

All we want to do is simplify things, make it real simple.

Tell us what we get and what we don't get, and then tell us what we need to pay and what we don't need to pay.

And that would make it extremely easy for those of us.

-Okay.

So are you saying that it is not easy currently?

-Oh, it's very complex.

And think about it from this standpoint--that a lot of times, those of us with 15 or less employees, like we are, if something happens with one of our employees, we have to go and get on the line and help do the work.

So where do we find time to do these other things with taxes and things like that?

-And in particular, for the TCJA and the small business aspect of it, it is a 20%-- you are allowed to exclude up to 20% of your qualified business income from federal income tax.

Luiz, how has this impacted your business?

(Luiz, Oliveira)Well, food and beverage business, as a lot of people know, there's a lot of overhead costs, and those 20% really help small business to have a little more, to breathe, because, otherwise, with the higher tax, how we're going to be reinvest in the small business?

As Shaun said early before about, small business represent a great amount of business in Nevada.

And one thing to remind, because every dollar that small business generate, 80% stay in our community.

When the corporate business, most of those money, as you mentioned, go to shareholders somewhere in the world or in somewhere in America.

The money doesn't stay here.

So it's very important to promote the small business in our state, because help to grow our community.

-And that 20%, it actually helps us with our self-employed tax and that, so it gives money back to the owner, which, again, we either reinvest back into our business or we put-- yeah.

-Everything.

Expansion-- -Winnie, you help Nevada businesses through various issues.

What have you heard about this particular provision of the TCJA?

(Winnie Dowling)So the TCJA was a very complex tax code change.

It affects a lot of people, individuals, but also businesses, large businesses, small businesses, all over the board, and it's very confusing.

It's also-- it's not easy to tell how to actually do your taxes.

So unless you have a really great tax professional doing your taxes, you're probably not taking advantage of it.

-And what is the reality of that for small businesses in Nevada, that they have an accountant?

-Yes.

And you know, as I think you said, you know, most businesses are small.

70% have less than 10 employees, and you probably don't have-- you can't pay a lot for an accountant because you're trying to cover your rent and your supplies and everything else.

So that's the reality.

It's just not simple.

-As you mentioned, TCJA includes individuals, corporate tax cuts, small business tax cuts, which I imagine puts you in a little bit of a strange situation, Mary Beth, because you're representing both businesses, small and big, in Las Vegas.

Where does the Vegas Chamber stand on this?

(Mary Beth Sewald)Yeah, you're exactly right, Amber.

It is and it is complex, but I think one of the arguments for extending the 2017 Tax Cuts and Jobs Act is to keep it as simplified as possible.

And truth be told, taxes, in general, are complicated.

And so I think regardless of whether the TCJA gets extended or not, people--small businesses, large businesses--will still have to have a tax professional.

So there is that, but, but yeah, you know, the Vegas Chamber is in support of businesses--small, medium, large, everybody--especially the little guys that don't have the resources like larger companies do.

So we are always trying to advocate on behalf of the entire employer community, and it would potentially impact the workforce as well.

-Shandell, to be clear, you want this tax cut to be extended, correct?

-We would love for it to be extended but reformed.

Let's just say it that way.

Let's say that, you know, we don't just want to extend it in its current form without any adjustments or anything made to help it, help small business owners.

So one of the things, I serve on the Board of Trustees for the Vegas Chamber and on Small Business Task Force.

-One of your many titles.

-One of the many things.

I'm all about small businesses, and I can tell you that in conversations with many small businesses and doing many surveys, is that we want it simple.

It doesn't-- like if it's extended or not extended or reformed, we want it to be very simple.

We want to focus on our customers and our employees and our community.

That's who small businesses are.

-And not have to pay an accountant.

-Amber, can I just add that there are not really any other benefits for small businesses regarding the tax code.

I mean in general, you know?

And that's why, I mean, if we are to cut out this individual credit, then there really isn't much else.

-You know, we don't mind paying an accountant.

We actually pay accountants, but we don't want their bill to get as large as-- you know, that's what happens, is when it's very complex, then their bill starts to extend.

So we pay accountants.

We pay bookkeepers, accountants, and all those folks as a small business.

But we don't want it to keep, to keep increasing the cost because the tax code is difficult.

-And you know, Amber, one other thing, too, that a lot of people don't realize is that come December 31 of this year, 2025, if the TCJA is not extended, this will mean the largest tax increase ever in the history of the United States, not just for businesses, but for individuals as well.

So it is really important that our congressional delegations start addressing this as soon as possible, because what we wouldn't want to happen is for it to come to the end of the year and then there's a scramble at the last minute to try to decide what to do.

-The tough thing is, is that the government needs revenue, and so the argument, the logic behind not extending all of the provisions of the TCJA is that, hey, we can generate some revenue and perhaps pay our bills and cut into that $36 trillion deficit.

Another idea, though, for a source of revenue, and I think that President Donald Trump prefers this, is that of tariffs.

So let's talk about that.

When I spoke with you on the phone ahead of this interview, Winnie, you talked about your concern for rural businesses, in particular, with tariffs.

Why is that?

-Rural businesses face a disproportionate share of increase in costs.

It's harder to get the product there, transportation, you know, they're just more remote.

So while inflation and supply costs were a big challenge for all businesses this summer, for rural businesses, it was, in particularly, you know, emphasized.

-Okay.

And then, Luiz, you are in the coffee business, and right now the United States National Coffee Association is reportedly asking the Trump administration to exempt coffee from any tariffs, saying that the additional duties already in place on Canada and Mexico could increase U.S. prices up to 50%.

You told me you are a member of that association.

-Yes.

-Do you support that?

-Of course I do, because the coffee price already has going up because several different variables around the world--weather, the climate, and the production has decreased--and which drove the price, commodity price up quite a bit, which we're going to start seeing very soon.

Everywhere you're going to go, the $5 for a cup of coffee-- -Not going to exist anymore.

-Yeah.

Could exist, but it's going to happen because the coffee price went up.

And now if you have a tariff on the top of that, it's going to go up even more.

So it's going to be coffee, like a beverage, the second most popular beverage after water is going to be maybe the third or the fourth one, because not everybody's going to be able to afford.

And one thing is a fact.

Right now in Brazil, they are roasting corn and to blend with the coffee to make the coffee price lower for the people to be able to drink.

-That impacts small restaurants as well.

Some of our favorite eateries, you know, that are in our neighborhoods, they're going to have to feel the brunt of that as well.

-Now, Luiz, what do you think about tariffs outside of coffee?

I believe when we spoke on the phone, you said you do think they could help the U.S. economy.

-Just an example, I come across the coffee shop, a lot of high profile people.

And one of those guests, he's building a house in Cabo, and he was telling me just recently, he decided, because he want to buy all the appliance for the house in Mexico, but he said it's not the same quality, it's not the same brand, and decide to buy all the appliance in America and send to Mexico.

And you have to pay 33% tax, tariff.

Yeah.

And without whatever now the new administration talking about tariffs.

I grew up in Brazil, as I mentioned to you.

Back in the 70s, if you want to buy a brand new motorcycle--a Honda, Suzuki--and you have to pay 100% tariff of the value of the motorcycle.

The government did that for many years, and they still doing in Brazil now.

30% they still going to pay tariff for certain product that are produced in Brazil to avoid-- the protection with the labor and everything in the country.

And I think what's happening right now in America, the tariff is going to help, because we represent, as a country, 28% of GDP in the world.

And if you look at China, represent only 20%.

And Europe combined, 16%.

So we have a lot of power buyer to really start telling people, okay, you want to tariff my product, we're going to tariff yours, because, as we're cutting taxes, tariff can be another source income for the country.

-It's hard to find an economist that does support tariffs, though.

Mary Beth, what is the Vegas Chamber's stance on this?

-Well, you know, we have a lot of examples and stories.

A lot of our members are calling and asking how to navigate a tariff environment.

There are a lot of examples of people already who are experiencing, honestly, negative effects from this.

At the Smith Center, they just--this was on the news last week--they purchased carpet and received a tariff bill to the tune of 50,000 extra dollars for the carpet that was purchased there.

So these are challenges that it's not just about governments paying governments.

It's people.

It's the consumer, right?

It's people paying, paying these tariffs.

-Will you be, if you are impacted by tariffs, Shandell, will you be passing that cost along to your clients?

-Well, you have no choice.

I mean, at the end of the day, we already work on small margins.

And I work on a lot of government contracts, so when you work on government contracts, they have a limit about how much you're going to get paid.

So when you add additional cost to that, it just shrinks our margins.

And it takes away things like our internship programs.

It takes away things that locally we support, like, how can we support some of the other philanthropic opportunities that we have?

It's going to affect, you know, our Chamber membership.

It's all these different things that come in as what we invest in, and we got to find the money somewhere.

-Okay.

Now, in addition to tariffs, another priority of the Trump administration is cracking down on illegal immigration.

This has led to several Immigration and Customs Enforcement raids across the country.

As of this taping, none have happened in Nevada; however, as we learned at a recent immigration town hall, just the fear of those raids is affecting local businesses.

-So what should you do during the raid?

-At an invite only "Know Your Rights" event inside el Mercado at Boulevard Mall, the American Civil Liberties Union of Nevada provided businesses with specific instructions on what to do if ICE raids them.

-A key thing to remember--and I know it's very hard, it can be hectic--but make sure that you stay calm and that your employees stay calm.

And don't have them run to the exits.

These federal agents have sometimes used it, the fact that someone has run, as an indication that they have done something wrong, so they will try to stop and question them.

-Clark County Commissioner Tick Segerblom hosted the event.

(Tick Segerblom) This community lives off immigrants.

And so the fact that they're terrified, don't want to come to work, don't want to take their kids to school, there's lots of things going on that we just want to push out and say, Don't worry.

You have lots of rights, and we're going to protect you as much as we can.

-Eric's Shoe Repair Owner Jose Ramirez attended the Know Your Rights session and says he'll share what he learned with immigrants he knows.

[speaking Spanish] -Having lived in the United States for 18 years and with an employment authorization card that he proudly showed us, he says he's not afraid of ICE.

What he does worry about, though, is whether his business can survive if the fear of ICE among his customers continues.

[translated from Spanish] They don't want to come to the market to shop, because they're scared that they'll be stopped and arrested.

Right now, I'm using my savings and money from my own pocket to keep operating this business, and, well, that's not a business.

I'm taking losses.

-The American Immigration Council estimates that-- estimates that immigrants make up 23% of Nevada's workforce.

The Pew Research Center says undocumented immigrants account for about 9% of Nevada's workforce and that, nationally, they represent about 5% of the U.S. workforce.

Those percentages are based on data from 2022.

Mary Beth, the headline of a recent Las Vegas Review-Journal article reads, quote, 'Catastrophic': Experts warn mass deportations could cause Nevada economic fallout.

Where does the Chamber stand on this?

-Well, you know, I think Commissioner Segerblom hit the nail on the head when he was talking about how it impacts workforce.

There are a lot of legal immigrants here in Southern Nevada.

And at 23%, that's a really large number.

And so I think our members are most concerned about how, how immigration laws and so forth will impact their own workforce, and will they be able to keep their doors open if they don't have workers?

-Luiz, you are an immigrant yourself from Brazil.

What do you think about President Trump's mass deportation proposals?

-Well, first of all, talking about immigration can become very polarized discussion, because as an immigrant that came from Brazil, I came as a student.

I came legal.

And after I was able to get a working visa with a major corporation, which I have the same card that he showed, the Work Employment Authorization, for over a decade.

And after they decide to apply for my green card, which I became a legal alien.

And after, became a U.S. citizen.

And talking about illegal immigration, I am in favor immigration America, because America was built with immigrants.

However, these invasions that we see happening right now, I tell people, How you like people jump your backyard and say, 'I'm going to stay here,' and you're not--cannot nothing to do about?

And I say, Get the hell out of here, because it's not your house.

It's my house here; it's my yard.

And I think what's happening, and I think the-- I see a lot of illegal immigrant here.

Fortunately for me, I don't have this problem with the force, because most of my employees are younger kids, high school kids and so forth.

But there's a lot of labor that's done with illegal immigration, and how we're going to solve the problem?

There is a problem with that since I came to America in 1980 with illegal immigration, that I remember immigration officers pretty much when I live in San Diego and Chicago, they were in a train station, subway station, asking people for paperwork.

If you don't have the paperwork, they will arrest you.

And eventually they will deport you.

So there is a problem going on in America for decades, and how we going to solve that?

That's a bigger problem.

That's the Congress, the government, to solve.

Because myself, as a citizen, and all of us who can give our opinion to our Congress person to say, Let's legalize, let's find a solution, but we cannot no longer allow the invasion that we have in America.

-Can someone help me understand how mass deportations would impact small businesses?

For example, is it a labor shortage issue?

Can you help me with that?

-Well, I would say-- let's say it is 20% or even 10%.

People that live here, they need to make a living.

Small business ownership is an option, and they're still paying licenses, taxes.

So all of that is still being collected.

I think it would be-- there would be impact just by people leaving that were paying those taxes before.

You know, what that number is actually, I don't know, but I think there would be impact.

-Do you want to expand?

-I think the proprietor there said it well.

Even like some of the businesses that rely on different people of immigrant status, and how do you determine if they are legal or not, right?

How do you just walk in and say, Okay, you know, it is from a standpoint of an invasion of your privacy.

If you could find out if I'm illegal, that's one thing; but to just show up and do these raids, that's-- I don't think that's fair on human rights.

I'll go from that perspective.

And I don't think it's fair with some of these businesses, that somebody could just walk into your business and then try to frisk all of your employees.

There has to be a different way of doing it and a more humane way of doing it.

-The U.S. Small Business Administration says it's going to be cracking down on illegal immigrants receiving federal business funding.

This sort of impacts what you do.

Can you explain how?

-I think we've always had the policy that if you're undocumented, that you don't qualify for those loans.

I know now it is, it is being enforced.

But you know, whether or not people are-- for example, at the Small Business Development Center, that is not something that usually comes up in advising.

You know, maybe it does, but that's not a question that we would normally ask people.

So I don't know for sure if that policy will be changed.

It's hard to say.

-I don't know if a lot of small business owners look at somebody of an illegal status and want to not comply with the law.

I think that's sort of a perception like, okay, we're just going to bring in somebody who's illegal.

We wouldn't do that.

We have to do I-9 forms and all of that.

So we know, you know, if we get a noted notification from the Department of Labor, whoever sends out a notice, we're going to comply, right?

So just know that we're going to comply with the law.

-It's set up so that you should be, but obviously it's not working, correct?

Luiz, would you-- -Well, example, I have an employee several years ago.

He came and did the paperwork, a Mexican guy.

I mean, I can never ask, Are you legal?

He showed me Social Security, the green card and everything, and I hired.

And few months later, I got a notification from the Social Security that his social security number was from a dead person.

-Wow.

-And so immediately, I confront him.

I asked him, Can I have a meeting with you?

And I said, your Social Security doesn't match your ID and all the information, and it is come from the Social Security Administration.

And he immediately like, No, they a liar.

I'm going to go over there right now, and I'm going to get my number correct.

And he never came back.

-You did the right thing.

That's what we would do.

-From Vegas Chamber perspective, this could have a large impact on the larger businesses in Southern Nevada; is that correct?

What are you eyeing?

What are you hearing from those you represent?

-Yeah, you know, we're hearing concern, just concern about the uncertainty of how this will go, like the concerns that Shandell pointed out, the concerns about workforce because we already have a workforce shortage here in Nevada, in Southern Nevada.

And so I think those are probably two of the largest concerns, and that's regardless of the size of business that you ask, but especially the larger businesses.

-Okay.

And then I want to-- we're nearing the end of this discussion.

Is there anything that you are following this legislative session that you are supporting adamantly or opposing?

-Well, as you know, Amber, at the Vegas Chamber, we advocate on behalf of all employers across the state, employees as well.

And so there are several pieces of legislation, more than 100-- or more than 800 bills so far in Carson City.

One has passed so far.

And so we have-- -Egg prices, right?

-Right, exactly.

We have a little bit of a road ahead of us.

We are looking at the bills, the largest bills that will impact, for example, diversification of our economy here.

Film tax, is that going to pass?

The Chamber has not weighed in on that as yet.

We're looking at the language of the bill.

But a lot of labor potential, labor laws coming down the pike, so the Chamber is very, very adamant.

We're big advocates on behalf of business across the whole state to keep our environment as friendly for the business ecosystem as possible.

-And that film tax credit bill, what are your concerns at this point?

-Well, we're looking at the language just to make sure that it fits for our economy right now.

I think all things being equal, if it's something that, if the language is good and if it's viable for our environment that we have right now and it can come to fruition, I think it bodes well for jobs.

It bodes well to diversify our entire economy.

And the other thing that the Vegas Chamber has in motion is a program where we are connecting our smallest businesses to the larger businesses, like the film tax or like Formula 1 or the A's and the Raiders and things like that.

So potentially, if we can make it work, it would be great for our small businesses.

-Yeah, we've seen-- We've seen success in that with the Super Bowl.

We've seen success with that when we opened the stadium with not-- with SB1, back when we had a special session where 15% of the small businesses would get opportunities, whether it was in the new stadium or in the expansion of the Convention Center.

Most people don't realize that we're making a great connection between tourism and our small businesses.

-That procurement program that we're working on right now, like they did at the Super Bowl with the Super Bowl host committee, that is going to be just a game changer for small business here.

-We're gonna have to follow up with you on that down the road.

Thank you all for joining Nevada Week.

-Thank you.

-And thank you for watching.

For any of the resources discussed, go to vegaspbs.org/nevadaweek.

And I'll see you next week on Nevada Week.

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