REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 1-3)
S.B. 96
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SENATE BILL NO. 96–COMMITTEE ON
REVENUE AND ECONOMIC DEVELOPMENT
(ON BEHALF OF THE JOINT INTERIM STANDING
COMMITTEE ON REVENUE)
PREFILED FEBRUARY 1, 2023
____________
Referred to Committee on Revenue and
Economic Development
SUMMARY—Revises provisions relating to taxation.
(BDR 32-374)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: No.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to taxation; revising provisions governing the
calculation of the amount of certain partial abatements of
property taxes; and providing other matters properly
relating thereto.
Legislative Counsel’s Digest:
Existing law provides for a partial abatement of property taxes, which has the 1
effect of establishing an annual cap on increases of property taxes. The formula for 2
calculating the partial abatement provides that the property taxes on properties 3
other than certain single-family residences or certain residential rental dwellings 4
may not increase by more than a percentage that is the lesser of: (1) the average 5
percentage of change in the assessed valuation of property in the county over the 6
immediately preceding 10 years, twice the percentage of increase in the Consumer 7
Price Index for the immediately preceding year or zero, whichever is greater; or (2) 8
8 percent. If the application of this formula results in a cap on increases of property 9
taxes for a fiscal year that is less than 3 percent, the property taxes imposed on 10
certain single-family residences and certain residential rental dwellings may not 11
increase by more than the percentage cap calculated under that formula. However, 12
if the application of the formula results in a cap on increases of property taxes for a 13
fiscal year that is 3 percent or more, the property taxes on those single-family 14
residences and residential rental properties may not increase by more than 3 15
percent. (NRS 361.4722-361.4724) 16
This bill revises the formula for calculating the partial abatement so that the 17
annual cap on increases of the property taxes on certain single-family residences 18
and residential rental property is 3 percent. Under this bill, the annual cap on 19
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increases of property taxes on any other property cannot be less than 3 percent or 20
more than 8 percent. 21
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 361.4722 is hereby amended to read as 1
follows: 2
361.4722 1. Except as otherwise provided in or required to 3
carry out the provisions of subsection 3 and NRS 361.4725 to 4
361.4729, inclusive, the owner of any parcel or other taxable unit of 5
property, including property entered on the central assessment roll, 6
for which an assessed valuation was separately established for the 7
immediately preceding fiscal year is entitled to a partial abatement 8
of the ad valorem taxes levied in a county on that property each 9
fiscal year equal to the amount by which the product of the 10
combined rate of all ad valorem taxes levied in that county on the 11
property for that fiscal year and the amount of the assessed valuation 12
of the property which is taxable in that county for that fiscal year, 13
excluding any increase in the assessed valuation of the property 14
from the immediately preceding fiscal year as a result of any 15
improvement to or change in the actual or authorized use of the 16
property, exceeds the sum obtained by adding: 17
(a) The amount of all the ad valorem taxes: 18
(1) Levied in that county on the property for the immediately 19
preceding fiscal year; or 20
(2) Which would have been levied in that county on the 21
property for the immediately preceding fiscal year if not for any 22
exemptions from taxation that applied to the property for that prior 23
fiscal year but do not apply to the property for the current fiscal 24
year, 25
whichever is greater; and 26
(b) A percentage of the amount determined pursuant to 27
paragraph (a) which is equal to: 28
(1) The greater of: 29
(I) The average percentage of change in the assessed 30
valuation of all the taxable property in the county, as determined by 31
the Department, over the fiscal year in which the levy is made and 32
the 9 immediately preceding fiscal years; 33
(II) Twice the percentage of increase in the Consumer 34
Price Index for all Urban Consumers, U.S. City Average (All Items) 35
for the immediately preceding calendar year; or 36
(III) [Zero;] Three percent; or 37
(2) Eight percent, 38
whichever is less. 39
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2. Except as otherwise provided in or required to carry out the 1
provisions of NRS 361.4725 to 361.4729, inclusive, the owner of 2
any remainder parcel of real property for which no assessed 3
valuation was separately established for the immediately preceding 4
fiscal year, is entitled to a partial abatement of the ad valorem taxes 5
levied in a county on that property for a fiscal year equal to the 6
amount by which the product of the combined rate of all ad valorem 7
taxes levied in that county on the property for that fiscal year and 8
the amount of the assessed valuation of the property which is 9
taxable in that county for that fiscal year, excluding any amount of 10
that assessed valuation attributable to any improvement to or change 11
in the actual or authorized use of the property that would not have 12
been included in the calculation of the assessed valuation of the 13
property for the immediately preceding fiscal year if an assessed 14
valuation had been separately established for that property for that 15
prior fiscal year, exceeds the sum obtained by adding: 16
(a) The amount of all the ad valorem taxes: 17
(1) Which would have been levied in that county on the 18
property for the immediately preceding fiscal year if an assessed 19
valuation had been separately established for that property for that 20
prior fiscal year based upon all the assumptions, costs, values, 21
calculations and other factors and considerations that would have 22
been used for the valuation of that property for that prior fiscal year; 23
or 24
(2) Which would have been levied in that county on the 25
property for the immediately preceding fiscal year if an assessed 26
valuation had been separately established for that property for that 27
prior fiscal year based upon all the assumptions, costs, values, 28
calculations and other factors and considerations that would have 29
been used for the valuation of that property for that prior fiscal year, 30
and if not for any exemptions from taxation that applied to the 31
property for that prior fiscal year but do not apply to the property for 32
the current fiscal year, 33
whichever is greater; and 34
(b) A percentage of the amount determined pursuant to 35
paragraph (a) which is equal to: 36
(1) The greater of: 37
(I) The average percentage of change in the assessed 38
valuation of all the taxable property in the county, as determined by 39
the Department, over the fiscal year in which the levy is made and 40
the 9 immediately preceding fiscal years; 41
(II) Twice the percentage of increase in the Consumer 42
Price Index for all Urban Consumers, U.S. City Average (All Items) 43
for the immediately preceding calendar year; or 44
(III) [Zero;] Three percent; or 45
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(2) Eight percent, 1
whichever is less. 2
3. The provisions of subsection 1 do not apply to any property 3
for which the provisions of subsection 1 of NRS 361.4723 or 4
subsection 1 of NRS 361.4724 provide a [greater] partial abatement 5
from taxation. 6
4. Except as otherwise required to carry out the provisions of 7
NRS 361.4732 and any regulations adopted pursuant to NRS 8
361.4733, the amount of any reduction in the ad valorem taxes 9
levied in a county for a fiscal year as a result of the application of 10
the provisions of subsections 1 and 2 must be deducted from the 11
amount of ad valorem taxes each taxing entity would otherwise be 12
entitled to receive for that fiscal year in the same proportion as the 13
rate of ad valorem taxes levied in the county on the property by or 14
on behalf of that taxing entity for that fiscal year bears to the 15
combined rate of all ad valorem taxes levied in the county on the 16
property by or on behalf of all taxing entities for that fiscal year. 17
5. The Nevada Tax Commission shall adopt such regulations as 18
it deems appropriate to ensure that this section is carried out in a 19
uniform and equal manner. 20
6. For the purposes of this section, “remainder parcel of real 21
property” means a parcel of real property which remains after the 22
creation of new parcels of real property for development from one 23
or more existing parcels of real property, if the use of that remaining 24
parcel has not changed from the immediately preceding fiscal year. 25
Sec. 2. NRS 361.4723 is hereby amended to read as follows: 26
361.4723 The Legislature hereby finds and declares that an 27
increase in the tax bill of the owner of a home by more than 3 28
percent over the tax bill of that homeowner for the previous year 29
constitutes a severe economic hardship within the meaning of 30
subsection 10 of Section 1 of Article 10 of the Nevada Constitution. 31
The Legislature therefore directs a partial abatement of taxes for 32
such homeowners as follows: 33
1. Except as otherwise provided in or required to carry out the 34
provisions of subsection 2 and NRS 361.4725 to 361.4729, 35
inclusive, the owner of a single-family residence which is the 36
primary residence of the owner is entitled to a partial abatement of 37
the ad valorem taxes levied in a county on that property each fiscal 38
year equal to the amount by which the product of the combined rate 39
of all ad valorem taxes levied in that county on the property for that 40
fiscal year and the amount of the assessed valuation of the property 41
which is taxable in that county for that fiscal year, excluding any 42
increase in the assessed valuation of the property from the 43
immediately preceding fiscal year as a result of any improvement to 44
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or change in the actual or authorized use of the property, exceeds the 1
sum obtained by adding: 2
(a) The amount of all the ad valorem taxes: 3
(1) Levied in that county on the property for the immediately 4
preceding fiscal year; or 5
(2) Which would have been levied in that county on the 6
property for the immediately preceding fiscal year if not for any 7
exemptions from taxation that applied to the property for that prior 8
fiscal year but do not apply to the property for the current fiscal 9
year, 10
whichever is greater; and 11
(b) Three percent of the amount determined pursuant to 12
paragraph (a). 13
2. The provisions of subsection 1 do not apply to any property 14
for which [: 15
(a) No] no assessed valuation was separately established for the 16
immediately preceding fiscal year . [; or 17
(b) The provisions of subsection 1 of NRS 361.4722 provide a 18
greater abatement from taxation.] 19
3. Except as otherwise required to carry out the provisions of 20
NRS 361.4732 and any regulations adopted pursuant to NRS 21
361.4733, the amount of any reduction in the ad valorem taxes 22
levied in a county for a fiscal year as a result of the application of 23
the provisions of subsection 1 must be deducted from the amount of 24
ad valorem taxes each taxing entity would otherwise be entitled to 25
receive for that fiscal year in the same proportion as the rate of ad 26
valorem taxes levied in the county on the property by or on behalf of 27
that taxing entity for that fiscal year bears to the combined rate of all 28
ad valorem taxes levied in the county on the property by or on 29
behalf of all taxing entities for that fiscal year. 30
4. The Nevada Tax Commission shall adopt such regulations as 31
it deems appropriate to carry out this section, including, without 32
limitation, regulations providing a methodology for applying the 33
partial abatement provided pursuant to subsection 1 to a parcel of 34
real property of which only a portion qualifies as a single-family 35
residence which is the primary residence of the owner and the 36
remainder is used in another manner. 37
5. The owner of a single-family residence does not become 38
ineligible for the partial abatement provided pursuant to subsection 39
1 as a result of: 40
(a) The operation of a home business out of a portion of that 41
single-family residence; or 42
(b) The manner in which title is held by the owner if the owner 43
occupies the residence, including, without limitation, if the owner 44
has placed the title in a trust for purposes of estate planning. 45
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6. For the purposes of this section: 1
(a) “Primary residence of the owner” means a residence which: 2
(1) Is designated by the owner as the primary residence of 3
the owner in this State, exclusive of any other residence of the 4
owner in this State; and 5
(2) Is not rented, leased or otherwise made available for 6
exclusive occupancy by any person other than the owner of the 7
residence and members of the family of the owner of the residence. 8
(b) “Single-family residence” means a parcel or other unit of 9
real property or unit of personal property which is intended or 10
designed to be occupied by one family with facilities for living, 11
sleeping, cooking and eating. 12
(c) “Unit of personal property” includes, without limitation, any: 13
(1) Mobile or manufactured home, whether or not the owner 14
thereof also owns the real property upon which it is located; or 15
(2) Taxable unit of a condominium, common-interest 16
community, planned unit development or similar property, 17
if classified as personal property for the purposes of this chapter. 18
(d) “Unit of real property” includes, without limitation, any 19
taxable unit of a condominium, common-interest community, 20
planned unit development or similar property, if classified as real 21
property for the purposes of this chapter. 22
Sec. 3. NRS 361.4724 is hereby amended to read as follows: 23
361.4724 The Legislature hereby finds and declares that many 24
Nevadans who cannot afford to own their own homes would be 25
adversely affected by large unanticipated increases in property 26
taxes, as those tax increases are passed down to renters in the form 27
of rent increases and therefore the benefits of a charitable exemption 28
pursuant to subsection 8 of Section 1 of Article 10 of the Nevada 29
Constitution should be afforded to those Nevadans through an 30
abatement granted to the owners of residential rental dwellings who 31
charge rent that does not exceed affordable housing standards for 32
low-income housing. The Legislature therefore directs a partial 33
abatement of taxes for such owners as follows: 34
1. Except as otherwise provided in or required to carry out the 35
provisions of subsection 2 and NRS 361.4725 to 361.4729, 36
inclusive, if the amount of rent collected from each of the tenants of 37
a residential dwelling does not exceed the fair market rent for the 38
county in which the dwelling is located, as most recently published 39
by the United States Department of Housing and Urban 40
Development, the owner of the dwelling is entitled to a partial 41
abatement of the ad valorem taxes levied in a county on that 42
property for each fiscal year equal to the amount by which the 43
product of the combined rate of all ad valorem taxes levied in that 44
county on the property for that fiscal year and the amount of the 45
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assessed valuation of the property which is taxable in that county for 1
that fiscal year, excluding any increase in the assessed valuation of 2
the property from the immediately preceding fiscal year as a result 3
of any improvement to or change in the actual or authorized use of 4
the property, exceeds the sum obtained by adding: 5
(a) The amount of all the ad valorem taxes: 6
(1) Levied in that county on the property for the immediately 7
preceding fiscal year; or 8
(2) Which would have been levied in that county on the 9
property for the immediately preceding fiscal year if not for any 10
exemptions from taxation that applied to the property for that prior 11
fiscal year but do not apply to the property for the current fiscal 12
year, 13
whichever is greater; and 14
(b) Three percent of the amount determined pursuant to 15
paragraph (a). 16
2. The provisions of subsection 1 do not apply to: 17
(a) Any hotels, motels or other forms of transient lodging; and 18
(b) Any property for which no assessed valuation was separately 19
established for the immediately preceding fiscal year . [; and 20
(c) Any property for which the provisions of subsection 1 of 21
NRS 361.4722 provide a greater abatement from taxation.] 22
3. Except as otherwise required to carry out the provisions of 23
NRS 361.4732 and any regulations adopted pursuant to NRS 24
361.4733, the amount of any reduction in the ad valorem taxes 25
levied in a county for a fiscal year as a result of the application of 26
the provisions of subsection 1 must be deducted from the amount of 27
ad valorem taxes each taxing entity would otherwise be entitled to 28
receive for that fiscal year in the same proportion as the rate of ad 29
valorem taxes levied in the county on the property by or on behalf of 30
that taxing entity for that fiscal year bears to the combined rate of all 31
ad valorem taxes levied in the county on the property by or on 32
behalf of all taxing entities for that fiscal year. 33
4. The Nevada Tax Commission shall adopt such regulations as 34
it deems appropriate to carry out this section. 35
Sec. 4. The provisions of NRS 361.4722, 361.4723 and 36
361.4724, as amended by sections 1, 2 and 3, respectively, of this 37
act, apply to the tax year which begins on July 1, 2023, and each 38
succeeding tax year. 39
Sec. 5. 1. This section becomes effective upon passage and 40
approval. 41
2. Sections 1 to 4, inclusive, of this act become effective: 42
(a) Upon passage and approval for the purposes of adopting any 43
regulations and performing any other preparatory administrative 44
tasks necessary to carry out the provisions of this act; and 45
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(b) On July 1, 2023, for all other purposes. 1
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