Gov. Jim Gibbons said he'll work to eliminate a $1,750 quarterly per-branch excise tax during his State of the State address last week.

"We appreciate the governor's efforts on our behalf," said Bill Uffelman, president of the Nevada Bankers Association. "It's one of the cornerstones of our legislative program."

Uffelman said the $7,000 a year tax on banks, which excepts one branch per county per bank, has been a burden on a successful industry.

"Every year you write a check before you can open the door," he said.

The tax brings in about $3 million for the state each year, and is especially hard on expanding businesses that create good jobs by opening new branches.

"So the notion of a penalty, of a price for opening another branch to service your customers ... just seems counterproductive," Uffelman said.

Bank of America and Wells Fargo, two of Nevada's largest banks, pay about $500,000 and $700,000 respectively.

But not everyone is championing the tax rollback.

"We have tremendous needs with roads and other really important priorities, and we need to hold onto revenue that is already coming in," said Assemblyman Joseph Hogan, D-Las Vegas, a member of the Ways and Means Committee. "We'll have to cut a lot of budgets just to stay within the current restrictions. We don't want to make that any more difficult with tax relief that doesn't reach the general public."

But a rollback of the branch tax won't be the only thing the banking industry asks for during the upcoming legislative session.

John Guedry, president of the Nevada Bankers Association and chief executive of Business Bank of Nevada, said the industry also pays a higher payroll tax percentage than other businesses.

"We think (rolling back the branch tax) is a great start," Guedry said. "But we obviously believe we need to be in parity with the rest of the business community."

While most businesses pay 0.65 percent currently, up from 0.63 in 2003, banks pay 2 percent, more than three timese the rate paid by other businesses.

Gibbons also said during his speech last week that he would seek a reduction in that rate to 0.62 percent. He did not mention rolling back the higher rate for banks.

The additional 1.35 percent tax on banks contributes $15 million to the annual budget, Guedry said.

"In a $7 billion budget, that's a pretty insignificant number, but as a single industry it's significant to us," he said. "We appreciate the effort on the governor's part to eliminate the franchise fee, which no other industry is responsible to pay. We also think there should be parity on the payroll tax."

Guedry has said the taxes were a reaction to the loss of tax revenue due to a downturn in the tourism and gaming industry after Sept. 11, 2001, but that singling out the banking industry for its success is unfair.

He said he hopes the Legislature will support the repeal of both taxes.

Repeal of the branch tax could make a big difference for banks with offices in smaller communities.

"Those branches are already marginally profitable. You're affecting that little bit of profitability," Guedry said, adding that the legislature pointed to the one branch per county exemption as a solution to that harm.

Sen. Dina Titus, D-Las Vegas, who lost to Gibbons in the 2006 governor's race, said she would consider supporting the rollback as an economic development measure for rural Nevada towns.

Rolling back the tax, she said, would benefit "small banks that are starting up and considering opening a branch in rural Nevada.

She said the state should consider the lost revenue as "an investment in economic development," especially with other revenue coming in at higher-than-projected levels.

Uffelman also said legislators point to branch excise fees in states with corporate income taxes as proof that the Nevada isn't the only state that singles out banks. But in fact, states with corporate income taxes levy the per-branch taxes on national banks because they aren't allowed to tax them in other way.

The branch taxes in other states are a way to even the playing field between in-state banks and national banks, Uffelman said.

But Hogan said the banking industry shouldn't complain about the tax, since it actually proposed it in 2003 as an alternative to a gross receipts tax.

"In a way this was their choice. They were accommodated in that request and so it really seems awkward to be claiming unfairness and inequity when in fact that was enacted at their suggestion," Hogan said.

But Uffelman said this week that the banking industry was forced to come up with about $25 million in revenue for the state or face a gross receipts tax on all businesses.

"In 2003 the alternatives, as far as banks were concerned, were worse," Uffelman said. "Businesses in general were opposed to the gross receipts tax."

Uffelman said legislators may be against rolling back the tax because they have expanded the budget since 2003.

"Government needs seem to expand to meet the revenue that's available," he said.

But Assemblyman Mo Denis, D-Las Vegas, said the Legislature, and the Ways and Means Committee of which he's a member in particular, would give the rollback serious consideration.

"We definitely will consider the rollback," he said. "But we obviously have to look at it in the bigger picture."

Business Bank's Guedry said other industries should be willing to pay their fair share, or fear similar taxes.

"Why is this industry singled out? What is the reason for charging a different rate? To me that's the biggest issue," Guedry said. "Any business, whether you're in the financial institution category, (should worry): Are you next? Are you the next industry they'll target if there's a budget shortage? We should all pay our fair share."