Most Nevadans won’t get full $300 rebate
June 2, 2005
The Senate Finance Committee on Thursday recommended approval of the governor’s proposed tax rebate plan – but not before lawmakers and the governor’s office agreed they can expect problems when Nevadans discover not everyone will get $300.
According to the Department of Motor Vehicles and legislative staff, most vehicle owners will get far smaller checks. Nearly half the 2 million registered vehicles in Nevada – 926,248 – will qualify for less than $75, and 120,000 of those will get less than $25. The average check will be about $142.
Sen. Bob Coffin, D-Las Vegas, said calls and e-mails he is receiving ask when the $300 checks will be arriving.
“Haven’t we done something wrong here? Haven’t we built up expectations?” he asked.
According to DMV records, 379,404 Nevada vehicles qualify for the full $300 check.
“The rest of the people are going to be damned angry,” said Coffin, saying they will resent rich people with new vehicles and businesses getting multiple checks for $300.
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He was joined by Carole Vilardo of the Nevada Taxpayers Association, who said the callers contacting her office all ask when their $300 checks will arrive.
Governor’s Chief of Staff Mike Hillerby agreed the expectations will be a problem.
“The point is, people are going to get back what they paid,” he said. “Those expectations that developed are going to be hard to control. People need to look at their last registration.”
He blamed, in part, press coverage of the governor’s proposed rebate for those expectations, saying the intent was always that people would get back what they paid for each vehicle registration up to $300.
The comments followed a debate over how to accomplish the proposed $300 million rebate. Gov. Kenny Guinn wants to issue checks to vehicle owners for the amounts they paid in registration fees in 2004. Hillerby said how to spend that money should be up to each individual.
Sen. Bob Beers, R-Las Vegas, argued a smarter and cheaper way to handle the rebate would be to credit the rebate amount when car owners renew their registration next year.
He argued that saves the cost of issuing and mailing checks, as well as the cost of tracking uncashed checks and other administrative costs totaling more than $2 million.
He said it would also eliminate the necessity for all businesses and everyone who itemizes deductions to report the rebate as income.
But the committee voted to issue checks to vehicle owners, rather than create a credit against next year’s registration.
Beers said he still disagrees with the governor’s office opinion that the state doesn’t have to issue Internal Revenue Service 1099 forms reporting the rebate checks as potential income. A certified public accountant who has done taxes for individuals and small businesses, Beers said the report is required.
Hillerby said the rebate is taxable only for people who claimed registration fees as a deduction last year. He said the state doesn’t have to issue 1099 forms because it doesn’t know whether the individual claimed registration fees as a deduction.
“You don’t need to do it because you don’t know how they treated it on their income tax,” he told the committee.
A lobbyist said later that using the same logic, no business would ever have to issue a 1099 because the state has no way to know whether the individual itemizes deductions.
The plan still has to make it through the Assembly.
n Contact reporter Geoff Dornan at email@example.com or 687-8750.