1. Assembly Bill No. 601–Committee on Taxation

CHAPTER........

AN ACT relating to taxation; revising the provisions governing the appraisal of real property

to include further grouping of parcels and an analysis of discounted cash flow; and

providing other matters properly relating thereto.

 

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. NRS 361.227 is hereby amended to read as follows:

  1. 361.227 1. Any person determining the taxable value of real property
  1. shall appraise:
  1. (a) The full cash value of:
  1. (1) Vacant land by considering the uses to which it may lawfully be
  1. put, any legal or physical restrictions upon those uses, the character of the
  1. terrain, and the uses of other land in the vicinity.
  1. (2) Improved land consistently with the use to which the
  1. improvements are being put.
  1. (b) Any improvements made on the land by subtracting from the cost of
  1. replacement of the improvements all applicable depreciation and
  1. obsolescence. Depreciation of an improvement made on real property must
  1. be calculated at 1.5 percent of the cost of replacement for each year of
  1. adjusted actual age of the improvement, up to a maximum of 50 years.
  1. 2. The unit of appraisal must be a single parcel unless:
  1. (a) The location of the improvements causes two or more parcels to
  1. function as a single parcel; [or]
  1. (b) The parcel is one of a group of contiguous parcels which qualifies
  1. for valuation as a subdivision pursuant to the regulations of the Nevada tax
  1. commission [.] ; or
  1. (c) In the professional judgment of the person determining the taxable
  1. value, the parcel is one of a group of parcels which should be valued as a
  1. collective unit.
  1. 3. The taxable value of a leasehold interest, possessory interest,
  1. beneficial interest or beneficial use for the purpose of NRS 361.157 or
  1. 361.159 must be determined in the same manner as the taxable value of the
  1. property would otherwise be determined if the lessee or user of the property
  1. was the owner of the property and it was not exempt from taxation, except
  1. that the taxable value so determined must be reduced by a percentage of the
  1. taxable value that is equal to the:
  1. (a) Percentage of the property that is not actually leased by the lessee or
  1. used by the user during the fiscal year; and
  1. (b) Percentage of time that the property is not actually leased by the
  1. lessee or used by the user during the fiscal year.
  2. 4. The taxable value of other taxable personal property, except mobile
  1. homes, must be determined by subtracting from the cost of replacement of
  1. the property all applicable depreciation and obsolescence. Depreciation of
  1. a billboard must be calculated at 1.5 percent of the cost of replacement for
  1. each year after the year of acquisition of the billboard, up to a maximum of
  1. 50 years.
  1. 5. The computed taxable value of any property must not exceed its full
  1. cash value. Each person determining the taxable value of property shall
  1. reduce it if necessary to comply with this requirement. A person
  1. determining whether taxable value exceeds full cash value or whether
  1. obsolescence is a factor in valuation may consider:
  1. (a) Comparative sales, based on prices actually paid in market
  1. transactions.
  1. (b) A summation of the estimated full cash value of the land and
  1. contributory value of the improvements.
  1. (c) Capitalization of the fair economic income expectancy or fair
  1. economic rent [.] , or an analysis of the discounted cash flow.
  1. A county assessor is required to make the reduction prescribed in this
  1. subsection if the owner calls to his attention the facts warranting it, if he
  1. discovers those facts during physical reappraisal of the property or if he is
  1. otherwise aware of those facts.
  1. 6. The Nevada tax commission shall by regulation establish:
  1. (a) Standards for determining the cost of replacement of improvements
  1. of various kinds.
  1. (b) Standards for determining the cost of replacement of personal
  1. property of various kinds. The standards must include a separate index of
  1. factors for application to the acquisition cost of a billboard to determine its
  1. replacement cost.
  1. (c) Schedules of depreciation for personal property based on its
  1. estimated life.
  1. (d) Criteria for the valuation of two or more parcels as a subdivision.
  1. 7. In determining the cost of replacement of personal property for the
  1. purpose of computing taxable value, the cost of all improvements of the
  1. personal property, including any additions to or renovations of the personal
  1. property but excluding routine maintenance and repairs, must be added to
  1. the cost of acquisition of the personal property.
  1. 8. The county assessor shall, upon the request of the owner, furnish
  1. within 15 days to the owner a copy of the most recent appraisal of the
  1. property.
  1. 9. The provisions of this section do not apply to property which is
  1. assessed pursuant to NRS 361.320.
  1. ~