Regardless of how they decide to treat the proposed tax rebate, the governor's office and members of Senate Finance agreed Thursday they can expect problems from Nevadans who think they're all getting $300 per vehicle.
According to data from both the Department of Motor Vehicles and legislative staff, the vast majority of vehicle owners will get far smaller checks. Nearly half the two million registered vehicles in Nevada - 926,248 - will qualify for less than $75 and 120,000 of those will get less than $25.
Sen. Bob Coffin, D-Las Vegas, said the calls and emails he is receiving all ask when the $300 checks will be arriving.
"Haven't we done something wrong here? Haven't we built up expectations?"
According to DMV records, 379,404 Nevada vehicles qualify for the full $300 check.
"The rest of people are going to be God damned angry," said Coffin saying they will resent rich people with new vehicles and businesses getting multiple checks for $300 apiece.
He was joined by Carole Vilardo of the Nevada Taxpayers Association who said the calls her office is getting all ask when will their $300 checks arrive.
Governor's Chief of Staff Mike Hillerby agreed those 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 to Nevadans. Gov. Kenny Guinn wants to issue checks to all those 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 to two million vehicle owners 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.
Beers also said he still disagrees with the governor's office opinion that the state doesn't have to issue IRS 1099 forms reporting the rebate checks as potential income. A CPA who has made a living doing taxes for individuals and small businesses, Beers said that report is required.
Vilardo said that was her understanding as well from accountants who deal with tax issues.
Hillerby said the rebate is only taxable for those who claimed registration fees as a deduction last year. And he said the state doesn't have to issue 1099 forms because the state doesn't have any knowledge of whether the individual actually claimed registration fees as a deduction or not.
"You don't need to do it because you don't know how they treated it on their income tax," he told the committee.
Another lobbyist said outside the room using that logic, no business would ever have to issue a 1099 since they have no way to know whether the individual itemizes deductions or not.
The committee took no action on how to handle the rebate plan.
Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.