Guest column: Nevada SJR 14 a ‘stealth tax’ (opinion)
For many of us property tax is the largest tax we pay. And if the special interests who benefit from that tax have their way, the Nevada Legislature is about to make it much larger.
Quietly and cleverly last year the Legislature passed a measure known as Senate Joint Resolution 14 (“SJR-14”). It is not in effect yet, because it is a constitutional amendment which must be approved a second time by the Legislature, and then a third time by the voting public.
But if SJR-14 does manage to become law, it will have a devastating impact. Since 1980 Nevada’s property tax values were based on the combination of land at its market value plus improvements at replacement cost, depreciated by 1.5 percent per year. This combined “taxable value” of a property cannot exceed its market value.
Since 2005 a new law limited any increase in property taxes on a home to a maximum of 3 percent per year.
Under SJR-14, however, a property which is sold or transferred would see the value of its improvements skyrocket to replacement cost-as-new, regardless of the age of the improvements. All of the depreciation would be wiped out, the 3 percent tax cap would be eliminated, and the market value ceiling would be gone.
Under recent conditions, buyers of property would now have to pay tax on values much higher than market value — in many cases more than double what the tax was before SJR-14.
For example under SJR-14 taxes on a 1,200 square foot house in Northwest Reno would increase from $677 to $2,264 a year upon sale! A 3,600 square foot home in Southwest Reno would see taxes increase from $8,343 to a whopping $13,698 per year!
Commercial property would see similar, and in many cases even higher rates of increase in property tax, producing unprecedented chaos for tenants, owners and buyers alike. This information comes from Washoe County Assessor Mike Clark, who is well informed about property values and has vigorously opposed SJR-14 and other hostile attacks on taxpayers.
Some might argue that this huge tax increase would only be a burden on the new owners of sold or transferred property. Not so fast! First, as a constitutional amendment SJR-14 would force the Legislature to remove any existing laws that conflict with it. Because market values would be exceeded, the market value ceiling law which has protected all property owners since 1980 would have to be eliminated.
Second, imagine the burden on someone selling their old home to buy a different one. The sky-high property taxes on the new home could make it impossible to afford, even if purchased at the same value.
Finally, when the cost of owning property goes up the value of the property goes down. Those of us who own property know very well the meaning and feeling of declining property values. Under SJR-14, regardless of whether property remains unsold, the prohibitive reality of the new tax burden would cause all property values to drop dramatically.
Until now this “stealth tax” has been kept under the radar. We are very grateful to County Assessor Mike Clark for exposing and opposing this terrible and destructive attempt to steal more of our earnings.
Contact Mike for more information on this. We must keep our eyes on Carson City and remain vigilant.
Les Barta is an Incline Village resident.