Supreme Court takes up NV Energy demand for $25 million tax refund
January 8, 2014
An appeal was taken up on Tuesday by the Nevada Supreme Court in which NV Energy is seeking the refund of some $25 million in taxes paid on coal imported into the state.
NV Energy is requesting the reversal of a district court ruling that denies the utility a refund of taxes paid on coal imported to fuel two Nevada power plants. The utility wants a refund for the three-year period covered by the lawsuit.
Lawyer John Bartlett told the court the ruling by Washoe County District Judge Janet Berry erred when she declared NRS 372.270, the statute imposing the tax, unconstitutional while providing NV Energy no repayment. Berry ruled the statute "facially discriminatory against interstate commerce in violation of the Commerce Clause."
Bartlett argued if the tax on imported coal violates the Commerce Clause of the U.S. Constitution by treating out-of-state coal differently than it would in-state coal, then the company is entitled to relief in the form of a refund.
Chief Deputy Attorney General Gina Sessions, however, said Berry's ruling was correct because utility was demanding "a multi-million dollar refund based on a purely hypothetical injury."
For years the utility paid a tax on coal imported to fuel the Valmy power plant in Northern Nevada and Reid-Gardner in the south. It filed to end the tax more than a year ago and now wants a refund.
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The law in question would exempt a Nevada coal producer from the sales and use tax while imposing it on imported minerals. She said the utility wasn't being treated unfairly compared to any competition because there is no coal producer in Nevada.
"The question is can you get a multi-million dollar remedy if you can't show discrimination," she said.
Deputy Clark County District Attorney Paul Johnson joined in the arguments because the county would lose more money than the state since it gets more of the sales tax revenue.
"You have to demonstrate you could have purchased the mineral in this state at a more favorable rate," he said.
Bartlett argued the tax is unfair compared to how other mineral producers in the state are treated, not just coal.
"In facially discriminating statutes, relief must be given," he said.