SB318

Senate Bill No. 318–Committee on Taxation

March 5, 1999

____________

Referred to Committee on Taxation

SUMMARY—Revises provisions governing collection of taxes on transfer of real property and clarifies responsibility for payment. (BDR 32-1434)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State or on Industrial Insurance: No.

EXPLANATION – Matter in bolded italics is new; matter between brackets [~~omitted material]~~ is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

AN ACT relating to taxation; revising the provisions governing the collection of the taxes on the transfer of real property; clarifying the responsibility for payment of the taxes; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. NRS 375.010 is hereby amended to read as follows:

1-2 375.010 The following terms, wherever used or referred to in this

1-3 chapter, have the following meaning unless a different meaning clearly

1-4 appears in the context:

1-5 1. "Buyer" means a person or other legal entity acquiring title to any

1-6 estate or present interest in real property in this state by deed, including,

1-7 without limitation, a grantee or other transferee of real property.

1-8 2. "Deed" means every instrument in writing, except a last will and

1-9 testament, whatever its form, and by whatever name it is known in law, by

1-10 which title to any estate or present interest in real property, including a

1-11 water right, permit, certificate or application, is conveyed or transferred to,

1-12 and vested in, another person, but does not include a lease for any term of

1-13 years or an easement.

1-14 [~~2.]~~ 3. "Escrow" means the delivery of a deed by the seller into the

1-15 hands of a third person, including an attorney, title company, real estate

1-16 broker or other person engaged in the business of administering escrows

1-17 for compensation, to be held by the third person until the happening of a

1-18 contingency or performance of a condition, and then to be delivered by

1-19 the third person to the buyer.

2-1 4. "Seller" means a person or other legal entity transferring title to

2-2 any estate or present interest in real property in this state by deed,

2-3 including, without limitation, a grantor or other transferor of real

2-4 property.

2-5 5. "Value" means:

2-6 (a) In the case of any deed not a gift, the amount of the full, actual

2-7 consideration paid or to be paid for the real property, excluding the amount

2-8 of any lien or liens assumed.

2-9 (b) In the case of a gift, or any deed with nominal consideration or

2-10 without stated consideration, the estimated price the real property would

2-11 bring in an open market and under the then prevailing market conditions in

2-12 a sale between a willing seller and a willing buyer, both conversant with the

2-13 property and with prevailing general price levels.

2-14 Sec. 2. NRS 375.030 is hereby amended to read as follows:

2-15 375.030 1. If any deed evidencing a transfer of title subject to the tax

2-16 imposed by NRS 375.020 and, if applicable, NRS 375.025, is offered for

2-17 recordation, the county recorder shall compute the amount of the tax due

2-18 and shall collect that amount before acceptance of the deed for recordation.

2-19 2. The buyer and seller are jointly and severally liable for the

2-20 payment of the taxes imposed by NRS 375.020 and 375.025 and any

2-21 penalties and interest imposed pursuant to subsection 3. The escrow

2-22 holder is not liable for the payment of the taxes imposed by NRS 375.020

2-23 and 375.025 or any penalties or interest imposed pursuant to subsection

2-24 3.

2-25 3. If after recordation of the deed, the county recorder disallows an

2-26 exemption that was claimed at the time the deed was recorded or through

2-27 audit or otherwise determines that an additional amount of tax is due, the

2-28 county recorder shall promptly notify the buyer or seller, or both, of the

2-29 additional amount of tax due. In addition to the additional amount

2-30 determined to be due, the county recorder shall impose a penalty of 10

2-31 percent of the additional amount due in addition to interest at the rate of

2-32 1 1/2 percent per month, or portion thereof, of the additional amount due

2-33 calculated from the date of the original recordation of the deed on which

2-34 the additional amount is due through the date on which the additional

2-35 amount due, penalty and interest are paid to the county recorder.

2-36 4. This section does not prohibit a buyer and seller from agreeing by

2-37 contract or otherwise that one party or the other will be responsible for

2-38 the payment of the tax due pursuant to this chapter, but such an

2-39 agreement does not affect the ability of the county recorder to collect the

2-40 tax and any penalties and interest from either the buyer or the seller.

3-1 Sec. 3. This act becomes effective upon passage and approval for the

3-2 purpose of adopting regulations by the department of taxation that are

3-3 necessary to carry out the provisions of this act and on October 1, 1999, for

3-4 all other purposes.