Tax decision shouldn’t hurt Douglas
December 29, 2006
Thursday’s Supreme Court decision invalidating reappraisal methods that put a value on views and lakefront properties in Washoe County won’t affect Douglas County, said Assessor Doug Sonnemann.
The Nevada Supreme Court ruled unanimously Thursday that methods used to assess property value at Incline Village in 2003-04 were unconstitutional and ordered a refund for the 17 residents who sued over their tax bills.
Sonnemann said no Douglas County residents complained that year.
“This tended to be more of a Lake than a whole-county issue. We hadn’t factored (land values) at the Lake for several years because we didn’t have enough vacant land sales,” he said. “This decision doesn’t affect Douglas County because of the lack of a land factor that year.”
Views are still an integral component of valuation at Lake Tahoe, but a new administrative code from the Department of Taxation set in 2005 addressed most of the issues, Sonnemann said.
“It’s hard to set perfect regulations to cover every situation,” he said. “So we try to put out the best guidelines possible.”
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The Supreme Court also invalidated the assessor’s use of values of beaches for lakefront properties and “tear down” properties in reappraisals, saying the methods may have been recognized in the appraisal industry but were not consistent with those used in the rest of Washoe County or in other counties.
The Supreme Court ruling upholds the decision made earlier this year by Carson District Judge Bill Maddox, who found that inconsistent application of those assessment methods within Washoe County “illustrates the high probability that the taxes were not assessed on an equal and uniform basis.”
The Nevada Constitution requires assessment methodologies be consistent statewide in order to ensure fair and equal assessed values of land and buildings.
That was the logic expressed by Justice Jim Hardesty of Reno, in his 23-page opinion issued Thursday. He found those methodologies unconstitutional because they were inconsistent both with the methods used throughout Washoe and other Nevada counties.
The opinion lays the blame more on the Nevada Tax Commission than on the Washoe Assessors office, pointing out the commission didn’t meet its statutory duty to establish regulations that county assessors could use in difficult assessment areas such as Incline, where lots are often unique and a middle-class tract home will sell for upwards of $1 million.
“In the absence of guidance from the Tax Commission, the county assessors in 2002 had to find their own methodologies for assessing property values,” Hardesty wrote.
The opinion states that the Legislature intended the commission to set statewide standards, not to let individual counties create their own systems for setting property values.
The opinion sets those land values back to what they were in 2002-2003, noting that the taxpayers involved “concede that their properties were properly valued” that year. And it orders the taxpayers receive a refund of the difference between that and what they paid in 2003-2004.
McGowan said that doesn’t mean a check will be in the mail because it will take time to work out exactly who is entitled to how much.
More importantly, he said, is figuring out what happens next.
“First of all, if it was wrong and the court says it was, and needs to be fixed, what is wrong and what has to be fixed?” he said. “And I don’t think the court meant those land values are fixed at the 2002 level forever. We need to know how to move forward.”
McGowan said it’s not at all clear whether the ruling can be used to challenge tax payments by other Incline homeowners or property owners in other counties. Those questions may mean a lot of work for the Tax Commission.
Susie Vasquez can be reached at firstname.lastname@example.org or 782-5121, ext. 211.