MINUTES OF THE Meeting

of the

ASSEMBLY Committee on Taxation

 

Seventy-First Session

May 3, 2001

 

 

The Committee on Taxationwas called to order at 1:34 p.m., on Thursday, May 3, 2001.  Chairman David Goldwater presided in Room 3142 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

 

COMMITTEE MEMBERS PRESENT:

 

Mr.                     David Goldwater, Chairman

Mr.                     Roy Neighbors, Vice Chairman

Mr.                     Morse Arberry Jr.

Mr.                     Greg Brower

Mr.                     David Brown

Mrs.                     Vivian Freeman

Mr.                     John Marvel

Mr.                     Harry Mortenson

Mr.                     Bob Price

 

COMMITTEE MEMBERS ABSENT:

 

Mr.                     Bernie Anderson - Excused

Mr.                     David Parks - Excused

Ms.                     Sandra Tiffany - Excused

 

STAFF MEMBERS PRESENT:

 

Ted Zuend, Fiscal Analyst

Cheryl O'Day, Committee Secretary

 

OTHERS PRESENT:

 

Kevin D. Welsh, Deputy Fiscal Analyst, Nevada Legislative Counsel Bureau

John A. Bohn, Executive Director, Incline Village Board of Realtors, also Represented the Nevada Association of Realtors

Dino Di Cianno, Deputy Executive Director, Nevada Department of Taxation

Carole Vilardo, Nevada Taxpayers Association

Mark Fiorentino, of Kummer Kaempfer Bonner & Renshaw, Represented Hilton Grand Vacations Company

Mark W. Schofield, Assessor, Clark County, Nevada

Kit Weaver, Assessor, Carson City, Nevada

Fred Hillerby, Represented Asentra

Robin Nyberg, Treasurer, Nevada Association of Medical Product Suppliers

 

 

Senate Bill 122:  Makes various changes concerning tax imposed on revenues from rental of transient lodging. (BDR 32-125)

 

Chairman Goldwater opened the hearing on S.B. 122.

 

Kevin D. Welsh, Deputy Fiscal Analyst for the Nevada Legislative Counsel Bureau (LCB), testified that there had been an amendment (Exhibit C) that had not shown on the reprint.  The amended language was to protect any existing entities, particularly convention centers and authorities, and to hold them harmless from any effects of S.B. 122 as it addressed the transient lodging room tax.

 

John A. Bohn, Executive Director of the Incline Village Board of Realtors (IVBR), also spoke on behalf of the Nevada Association of Realtors (NAR).  Mr. Bohn described incidents that occurred in Incline Village with respect to the Reno-Sparks Convention and Visitors Authority (RSCVA) (Exhibit D).  Although the RSCVA admitted to confusion with respect to the overly broad definitions, it nevertheless assessed transient occupancy tax, late fees and penalties against long-term leases.

 

Mr. Brower described the situation as a “Catch-22.”  He agreed with Mr. Bohn and did not believe the description given represented the legislature’s intent.  Mr. Brower felt the committee should clarify the legislation in whatever manner deemed appropriate by the Chair and the committee.

 

Chairman Goldwater voiced his desire to speak with representatives of the Nevada Department of Taxation (NDT).  He then asked Mr. Di Cianno whether the NDT or the RSCVA collected those transient lodging taxes.

 

Dino Di Cianno, Deputy Executive Director, Nevada Department of Taxation, responded that the RSCVA collected those taxes.

 

Carole Vilardo testified she was one of many individuals involved with the “253 Committee” who worked to propose a solution to the issue.  Ms. Vilardo stated that, when the matrix was done, it assumed all entities affected by the legislation followed a 28- to 30-day rule before collecting.  The reason for the language being so general was due to the fact that Winnemucca continued to collect the tax for 90 days.  The suggested changes were to simplify and consolidate codification of the room tax provisions.  It was not intended that the pertinent entities go back and change their ordinances.  They were to go forward with new ordinances or, if an ordinance was silent to a specific provision, they would then follow that ordinance.  Ms. Vilardo advised that once the language was reinstated, ordinances would not be changed and entities would continue to operate as they had in the past.  Winnemucca could not be changed to a 28-day calendar without impacting their bonding procedures.

 

Mr. Brower acknowledged that the statute needed to be somewhat broad.  He was concerned with how it could be interpreted in a case such as Mr. Bohn’s example.  Mr. Brower reiterated that the record must be clear that the tax was not intended for long-term rentals.  At the Chair’s inquiry, Mr. Brower stated that no bill was proposed for the reasons set forth by Ms. Vilardo.  He clarified that the definition of “long-term rental” varied by county.  Trying to set out more detail within the statute would only create other problems in the future for different counties.

 

Mark Fiorentino, of Kummer Kaempfer Bonner & Renshaw (KKBR) and representing Hilton Grand Vacations Company, confirmed the issue was discovered when the bill was first introduced; however, no one had foreseen the consequences during the interim discussions.  He discussed two concerns with the bill as originally introduced, how they were deleted by the Senate, and that he supported that deletion.  He was also concerned with Section 48 as written.

 

Mr. Fiorentino provided a written statement of what he believed was the true legislative intent (Exhibit E).  He advised that Section 47 originally set out a formula for calculating time-shares.  The formula included an imposition of tax on the fee that one might pay to trade occupancy rights.  The original Section 47 would have allowed a local government to impose a tax on that fee, which they believed was an expansion of existing law.  Mr. Fiorentino stated taxes were being paid on rooms that were rented to the public.  No one should be required to pay tax on the transfer fee.  He outlined Section 48 and how it dealt with local governments’ authority to set a value for the lodging portion of a package deal.  Mr. Fiorentino closed by stating that he felt the last paragraph adequately reflected the legislative intention.

 

Chairman Goldwater stated if the bill proceeded, the committee would make a Statement of Legislative Intent part of the motion read in the floor statement so the legislative intent was clarified.  The Chair then discussed short-term rental room tax in Assembly District No. 10 with Mr. Fiorentino.

 

Ms. Vilardo stated she was not testifying in favor of S.B. 122.  She discussed the administrative provisions the government used and how they were in so many sections of law.  A small business attempting to comply with those provisions could easily make an error.  S.B. 122 made it easier for small businesses to comply with the law.

 

Chairman Goldwater closed the hearing on S.B. 122.

 

 

Senate Bill 376:  Makes various changes relating to taxation. (BDR 32-187)

 

Chairman Goldwater opened the hearing on S.B. 376.

 

Mark W. Schofield, Clark County’s assessor, discussed the condensed sections by subject matter, pursuant to his handout (Exhibit F).  Mr. Schofield outlined Sections 1, 2 and 3 as being cross-referenced to Section 27.  He stated that Section 27 dealt with procedure in those cases where a taxpayer over- or under-paid their tax, the tax was either refunded or rebilled.  He discussed the statutory excusing of property taxes due and owing, if under $15.  He asked that any overpayment of tax under $15 not be refunded unless specifically requested.

 

Kit Weaver, Carson City’s assessor, discussed the next group of sections and how they dealt with manufactured housing.  Mr. Weaver advised that there were references through NRS 361 to mobile homes.  Anything that occurred and applied to mobile homes, also applied to manufactured housing.  The statute specified that an inspector must verify the running gear had been removed; it had been 20 years since that issue was a concern.  S.B. 376 placed the decision of converting to real property with the property owner and the Nevada Division of Manufactured Housing (NDMH).  He stated that Section 19 also dealt with manufactured housing.  He discussed the time cutoff of 18 months before the lien date and informed the committee that for the 2002 through 2003 tax year, they could not use sales that took place in April 2001.  Mr. Weaver said they were asking to be allowed to use sales up until July 1, 2001, which was 12 months before the lien date.  He discussed the $3 per month penalty on delinquent mobile home and manufactured housing taxes and felt it did not make sense to add such a penalty when the homeowners were already unable to pay the annual taxes.

 

Mr. Schofield advised that the fee was removed last session also; it had simply been overlooked this session and not deleted from the companion bill.  He then continued with his outlining and advised that Section 6 was deleted by amendment in Senate Taxation and that Sections 7 and 30 dealt with the senior citizens’ property tax assistance program.  They were asking for the allowance to provide taxpayers the benefit of calculating both their homeownership as well as rental property on a pro rata basis, rather than just one or the other.  He described that action as a good benefit for seniors, and the right and fair thing to do.

 

Mr. Schofield advised that Sections 8 and 20 dealt with requiring Letters of Authorization signed by property owners.  He felt a property owner must be shown to be aware when an individual purported to represent them during an appeal process.  There had been instances where tax consultants had appealed for reductions and then attempted to “share” the savings procured.  Sections 10 and 10.5 dealt with a practice that was already in effect which involved transient property being exhibited and how the tax was impractical and perhaps impossible to assess or collect.  Section 11 dealt with timeshares and how the personal property, equipment and furnishings were treated.  Mr. Schofield discussed an appellant who took them to the appeals boards and to the district and supreme courts.  The settlement was based on the fact that household goods would be treated the same as if owned by a single family.

 

Mr. Weaver then addressed the question of why there was a widow exemption but no widower exemption and discussed “surviving spouse” language.  Sections 12 and 13 allowed the exemption to be applied to real or personal property.  Sections 31 and 31.5 allowed the exemption to be used with respect to a vehicle.

 

Mr. Schofield stated that Section 14 was clean-up language regarding airport-owned property used exclusively by the airport.  Section 15 had been deleted by amendment in the Senate.  He described Section 16 as another good safety mechanism for taxpayers in that it required a parcel number to track an appeal and what property was being appealed.

 

Mr. Weaver described Sections 23 and 24 as an exchange of language by replacing “county treasurer” with “tax receiver.”  They also wished to remove the requirement that taxes be paid in triplicate when paid in protect.  He stated that Section 28 dealt with the ten-day grace period and that it was to apply to manufactured housing and all personal property.  Section 29 dealt with excess proceeds and how the excess proceeds of any tax sale of real or personal property was to go back to the prior owner.

 

Mr. Schofield advised that Sections 32 through 42, exclusively, and Sections 44 and 59 dealt with subject matter tied to a 1997 statute that involved building permits and confidential proprietary information.  Entities with building departments were required to provide copies of building permits to the assessors.  Further, state, county and local agencies that had proprietary information were required to provide that information to the assessors.  There had been very little opposition to the bill and it put into law practices that were already in place.  Section 43 addressed another practice already being done.  The section prohibited assessors of any county to reconfigure any boundaries of any property without following the sections that dealt with the division of land, NRS 278.010 to 278.630, inclusive.

 

Mr. Weaver discussed Sections 45 through 58, which addressed the livestock “head” tax.  That tax was billed, collected, and transferred to the Nevada Department of Agriculture (NDA).  He stated that Paul Iverson of the NDA had agreed that the assessors should not be required to process the livestock tax and that the NDA would take over the collection of that tax.

 

As to Section 14 and the airport property, Mr. Price asked whether private hangers that were used for business purposes were paying taxes.

 

Mr. Schofield confirmed there were taxes paid on that type of use on the improvements alone, not on the property.  He included that McCarran Airport paid property taxes on homes it had purchased because of noise contours.

 

Chairman Goldwater called for further testimony before he closing the hearing on S.B. 376.

 

 

Senate Bill 528:  Clarifies provisions relating to taxation of medical devices sold to governmental entities. (BDR 32-1134)

 

Chairman Goldwater opened the hearing on S.B. 528.

 

Carole Vilardo stated she was testifying in support of S.B. 528.  Ms. Vilardo believed the bill had been drafted as tightly as possible with the assistance of the LCB so that it addressed the intended matter.  She discussed how beneficial it would be if the Nevada Department of Human Resources (NDHR) again took title and went back to pre-1996 provisions.  In that case, S.B. 528 would not be necessary.  Since that did not seem possible, she stated that S.B. 528 served individuals who had something prescribed by a licensed provider.  She felt it was only fair that they be exempt from the tax since, without the proposed legislation, businesses would continue remitting taxes that were not being collected.

 

Fred Hillerby introduced himself as representing Asentra, a Las Vegas company.  Mr. Hillerby stated that Ms. Vilardo had provided good reason for the bill and he was present to add Asentra’s support.

 

Robin Nyberg introduced herself as the treasurer of the Nevada Association of Medical Product Suppliers (NAMPS).  Ms. Nyberg admitted that the bill did not address all that NAMPS had hoped, but S.B. 528 did provide clarification of the law.  For that reason, NAMPS was in total support of S.B. 528.

 

Chairman Goldwater closed the hearing on S.B. 528.

 

 

Senate Joint Resolution 11 of the 70th Session:  Proposes to amend Nevada Constitution to authorize abatement of property tax for certain owners of single-family residences (BDR C-1435)

 

Chairman Goldwater opened the hearing on S.J.R. 11 of the Seventieth Session.

 

Carole Vilardo of the Nevada Taxpayers Association (NTA) testified in support of S.J.R. 11 of the Seventieth Session.  Ms. Vilardo advised that, if passed by the Assembly, S.J.R. 11 of the Seventieth Session could be on the November 5, 2002 ballot.  She believed a number of committee members were aware that many people were upset about the amount of their tax increases.  She hoped the resolution would allow for the identification of those conditions that created an economic hardship for single-family homeowners.  She stated very clearly that the state did not want persons put out of their homes because their tax bill had become to great.  S.J.R. 11 of the Seventieth Session provided the legislature with a necessary level of flexibility and there currently existed no mechanism for defining hardships.  There had been much interest in using the property tax beyond its current use, but Ms. Vilardo reiterated that the state did not want people put out of their homes.  To have homeowners lose their homes because of taxes was counterproductive and would only increase the amount of social services they would require.

 

Chairman Goldwater and Ms. Vilardo discussed the homesteading process and what benefit it served homeowners.

 

Ms. Vilardo closed by addressing the fact that the property tax could allow for the provision of exemptions, abatements, or other options to provide relief to homeowners.

 

Mr. Schofield described himself as a very strong advocate of S.J.R. 11 of the Seventieth Session.  He advised the committee that the legislature currently held the ability to provide services to owners of manufactured homes.  It related to those who could not afford their property taxes and could meet certain criteria.  He elaborated, stating that the Nevada Constitution allowed for the exemption of any personal property, if deemed necessary.  Mr. Schofield closed by saying that he was unaware of any family being put out of their manufactured home because their could not afford the taxes.

 

Chairman Goldwater closed the hearing on S.J.R. 11 of the Seventieth Session and adjourned the meeting at 2:24 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Cheryl O'Day

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblyman David Goldwater, Chairman

 

 

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