Revised Nevada ‘green’ tax bill offered
Associated Press Writer
Nevada lawmakers, backed by a new legal opinion, offered a revision Wednesday of a new “green” tax bill that will substantially reduce property tax breaks and eliminate retroactively most of the sales tax exemptions that had been sought by developers.
The new version allows for between 2 and 8 percent property tax break for up to 10 years, down from the 25 to 35 percent originally proposed.
Also, only construction supplies purchased between October and December 2005 would be eligible for the sales tax break – long before most companies expressed interest in the exemption.
Two companies, Boyd Gaming Corp. and Molasky Companies which had already applied for the tax breaks, opposed the revised version on grounds it would no longer offer a strong enough incentive to build according to green standards. A Molasky representative said it could jeopardize the firm’s construction financing.
The move came on the same day lawmakers were advised that they’d be on safe legal ground in revising – and even scrapping – big tax breaks approved in 2005 that allowed up to a 50 percent property tax abatement and an exemption on sales taxes for all construction materials used to meet “green” standards.
Also on Wednesday, the Senate Finance Committee voted unanimously to delete similar tax breaks in SB437, a wide-ranging energy bill sponsored by Sen. Randolph Townsend, R-Reno. The bill contained 50 percent property tax breaks for homeowners who build according to green standards.
Townsend agreed to delete the breaks from the bill after committee members expressed concerns about the long-term effect of those tax breaks on school funding. He said he’ll work on a residential “green” building tax break for the next session.
Senate Finance voted to support the amended bill, which includes a variety of regulatory changes affecting renewable and traditional energy companies.
Lawmakers started looking into the financial effects of the old tax break law after being told by state Budget Director Andrew Clinger that the incentives could cause a big budget revenue hole.
Clinger’s boss, Gov. Jim Gibbons, then vetoed a bill to suspend the tax breaks, upsetting some legislators who said the initial concern about the incentives came from the Gibbons administration.
Earlier this week, legislators disclosed a letter from the state Taxation Department to the governor’s legal advisers that shows the agency acted to finalize several applications for the tax breaks in April, after lawmakers already were questioning them.
The letter shows the agency moved to finalize applications for sales tax breaks by MGM Mirage and Fontainebleau on April 16, and by the Las Vegas Sands Resort on April 23. Assemblywoman Debbie Smith, D-Sparks, said lawmakers started inquiring about the tax breaks in late February and early March.
The letter shows what critics describe as disarray involving the tax breaks. Some companies got tax deferral certificates while others got “opinion letters” stating they’re eligible. Only two, MGM Mirage and the Molasky Corporate Center, applied for the tax break during the window allowed by a 2005 law, October through December 2005.
One company asked for an opinion as late as May 2, the day the Senate passed the bill to suspend the tax breaks.