Court takes up NV Energy refund demand
January 8, 2014
ABOUT THE CASE
For years, NV Energy paid a tax on coal imported to fuel the Valmy power plant in Northern Nevada and Reid-Gardner in the south. It filed to end the tax more than a year ago and now wants a refund.
NV Energy wants the Nevada Supreme Court to reverse a district court ruling denying the utility a refund of taxes paid on coal imported to fuel two power plants. On Tuesday, the high court took up the case.
The utility wants some $25 million for the three-year period covered by the lawsuit. Lawyer John Bartlett told the court the ruling by District Judge Janet Berry effectively strikes down the statute imposing the tax by ruling it “facially discriminatory against interstate commerce in violation of the Commerce Clause,” but provided NV Energy no repayment.
He argued that if the tax on imported coal violates the commerce clause of the U.S. Constitution by treating out-of-state coal differently from in-state coal, the company is entitled to relief in the form of a refund.
But Chief Deputy Attorney General Gina Sessions said Berry’s ruling was correct because the utility was demanding “a multi-million dollar refund based on a purely hypothetical injury.”
The law in question would exempt a Nevada coal producer from the sales-and-use tax while imposing it on imported minerals. The utility wasn’t being treated unfairly compared with any competition because there is no coal producer in Nevada, Sessions said.
“The question is, can you get a multi-million dollar remedy if you can’t show discrimination?” she said.
“You have to demonstrate you could have purchased the mineral in this state at a more favorable rate,” said Deputy Clark County District Attorney Paul Johnson, who joined in the arguments because the county would lose more money than the state, given that it gets more of the sales-tax revenue.
He said the simple fact is there is no competitor, so the utility wasn’t treated unfairly compared with its competition.
The tax is unfair compared with how other mineral producers in the state are treated, not just coal, Bartlett said.
“In facially discriminating statutes, relief must be given,” he said.
The court took the case under submission.
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