INCLINE VILLAGE, Nev. — A ruling handed down this week by a Washoe County District Court judge partially affirms Incline Village residents' challenge earlier this year of the rate of interest to be paid on $43 million in Supreme Court-ordered refunds.
Judge Brent Adams' three-page order on Monday rules that a 6 percent interest rate be applied to all Incline property tax overpayments made prior to July 1, 2011, for the 2006-07 year. Furthermore, Adams ruled that a 3 percent interest rate be used after that date for each refund.
According to previous reports, the Nevada Legislature in 2011 passed Assembly Bill 504, which Gov. Brian Sandoval signed into law on June 17. The bill, which revises provisions governing delinquent taxes and refunds, went into effect July 1, 2011.
The bill changes the interest rate that is paid along with a tax refund to .25 percent per month (or 3 percent annually). Prior to the bill, the rate was .50 percent per month, or 6 percent annually.
The litigation filed in early March 2012 by a group of residents including members of the Village League to Save Incline Assets asked Adams to rule that Washoe County Treasurer Tammi Davis stick with the 6 percent rate when doling out all refunds.
Davis and the county opposed the motion, and while waiting for a ruling, Davis suspended the process of including interest in her calculations of refunds when issuing checks to the some 8,700 parcels due a payback.
Adams' ruling on Monday also orders Davis to cease the suspended payments. For parcel owners who've received a refund check sans interest, Davis must “calculate the interest due ... and remit the amount to the respective taxpayer.”
The ruling marks the latest chapter in the Incline Village tax revolt that reached new heights on July 7, 2010, when a Nevada Supreme Court ruling affirmed a 2009 district court decision ordering the Washoe County treasurer to refund about 8,700 local property owners for taxes they paid for the 2006-07 fiscal year.
According to the county, as of June 12, 2012, nearly 30 percent of refunds have been paid back, to 2,564 parcels. The dollar amount refunded is about $21.5 million.
In a Tuesday phone interview, Davis said her office anticipates it will have all the refunds finished by a district court-ordered deadline of 5 p.m. on Aug. 23, 2013.
“I think we will still be in shape to meet that date,” said Davis, adding that she will begin including interest as part of the outstanding refunds, in accordance with Adams' ruling, by the end of July.
Maryanne Ingemanson, president of the Village League, said she and the league was pleased with Adams’ ruling. Still, she remains skeptical of the county’s payback plan, which she said will likely stretch all the way to the August 2013 deadline.
“It’s disheartening that these refunds are not being paid back precipitously,” she said Wednesday. “It appears they are taking as long as the court will allow them, and that causes great frustration.”