Geoff Dornan

Follow Me

Back to: News
June 19, 2012
Follow News

City of Fernley files suit seeking more tax revenue

Fernley has filed a lawsuit demanding a bigger share of the consolidated tax revenue received by Lyon County.

The suit filed June 6 in Carson District Court argues that the way the consolidated tax system is set up denies Fernley any chance of receiving a fair share of the revenue it generates. That revenue is used to cover operating expenses and provide services by local governments throughout Nevada.

The C-Tax was created in 1997 to split up money among local governments in Nevada. It consists of the tobacco and liquor taxes, governmental services tax, real property transfer tax, basic city-county relief and supplemental city-county relief portions of the sales tax.

"The C-Tax system is not designed to allow for any meaningful adjustment to distributions," the suit argues.

The system says that if a local entity doesn't seek an adjustment in its first year after incorporation, adjustments are barred.

"What this means is that a jurisdiction like Fernley, that begins with a low base allocation, has no hope of ever obtaining a meaningful adjustment," the suit says.

The suit says Fernley's share of the revenue generated by the six revenue streams making up the C-Tax hasn't increased since before it was incorporated in 2001. In 1997, that revenue was $86,000. In 2011, it was $143,143 despite the fact that the population of Fernley had increased from 8,000 to 19,000.

That is less than a percent of the $14.8 million Lyon County received in 2011.

The suit argues Fernley's portion of the tax is much less than other cities of comparable size; Fallon receives more than $1.4 million, Winnemucca $3.55 million and Elko $11 million.

Fernley officials ask the court to declare the C-Tax system unconstitutional because it is "non-uniform and unequal in its effect upon Fernley and other similar towns."

Stories you may be interested in

The Nevada Appeal Updated Jun 19, 2012 01:01PM Published Jun 19, 2012 01:01PM Copyright 2012 The Nevada Appeal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.