Assessors struggle with implementing new tax cap

In Carson City and across the state, assessors are beginning to make reforms needed to comply with a new cap on property tax increases - reforms officials say could lead to challenges, and not just regarding taxes.

"This is going to be really interesting," Carson City Assessor Dave Dawley told the Board of Supervisors Thursday.

The cap signed into law by Gov. Kenny Guinn this month limits residential property tax increases to 3 percent and commercial property at 6.26 percent in Carson City. Statewide, the cap on commercial property tax increases could go as high as 8 percent.

Next month, assessors will begin mailing out questionnaires asking homeowners to vouch for whether they live in their house or rent it out.

Rentals will be considered commercial and subject to potentially higher tax hikes.

If a questionnaire isn't returned, the assessor will automatically classify it a rental. As shaky as it sounds, Dawley said it's got to be done.

"Every single other county in Nevada is doing the same thing," he said.

Dawley expects a number of challenges to tax increases by people who failed to return the voucher and were mistakenly tagged with the "rental" classification.

The city will be prepared for that, said Carson City Treasurer Al Kramer. A system will be in place so staffers can easily change tax bills to reflect a residential rather than commercial building.

There also could be challenges against homeowners who falsely claim their house is not a rental when it really is.

The vouchers will likely say "under the threat of perjury" to deter people from providing false information. But a lower property tax rate might be enough to lead some people to take the chance that they won't get caught. Perjury is a class B felony, punishable by one to five years in jail.

A "trailer bill" now being worked on to clear up some questions raised in the original legislation may stiffen the penalty for lying on the voucher, Dawley said.

If a property is a rental, the assessor will send more forms, asking things like how many units are rented out and how much money they bring in.

It will be up to the property owner to let the city know if a property's status has changed, Dawley said.

However thin the possibility of it happening in Nevada, an erroneous residential versus commercial designation could also lead to voter challenges.

That possibility may never have occurred to assessors had partisan groups not converged on battleground states during November's general election, when thousands of votes were challenged and disqualified because addresses on voter registration forms didn't match addresses in county records.

n Contact reporter Cory McConnell at cmcconnell@nevadaappeal.com or 881-1217.