The tax revolt has caused a stir in Washoe County government circles and in Carson City as well where Nevada legislators have new property tax legislation under consideration. The purpose of this article is to examine why the difficult wording in current laws disables Washoe County Appraisers, creates many taxpayer misconceptions, and generates some odd outcomes in the tax bills to be paid.

Chief Deputy Assessor John Faulkner spoke candidly to TTNN: "As the laws exist, they don't provide the possibility for equalization as the taxpayer would imagine it. And housing market factors only increase the difficulties, causing Incline Village's property taxes to remain un-equalized when compared to other counties."

Confusion at all Levels over Modifiers
Faulkner explains: "The 1981 Nevada Tax Shift left assessors with the duty of creating modifiers to explain property values. Many of the modifiers are still poorly codified. The 2004 amendments to the Nevada Administrative Codes only confused matters further."

"The use of unidentified flying modifiers, as Maryanne Ingemanson, President of the Village League, calls them, "is one of the major reasons I believe Incline has been unfairly taxed."

Faulkner says: "A good example where the language is confusing can be easily found in the 2004 amendments to the Nevada Administrative Codes."
--NAC 361.118 reads:
The elements of comparison between the comparable properties and the subject properties that may be used by the county assessor include, without limitation, the real property rights conveyed, financing terms, conditions of sale, market conditions, location, physical characteristics, size, zoning or use, governmental restrictions and non-realty components of value.

Faulkner: "Aren't conditions of sale, location, and physical characteristics all realty components of value? And isn't a view (of the lake) a physical characteristic and a condition of sale? What about market conditions (inflation, demand, and appreciation)? Aren't these terms realty components of value also? What are we really supposed to do here?"

Inequity Built Into System
Chief Appraiser Steve Churchfield says: 'Inequity is built into the system. Two similar properties with similar homes could be depreciated differently, or the land attributes can total differently. There are number of reasons property values can be different. When comparing a Washoe to a Douglas County (NV) property, Douglas is two years behind us on the evaluation cycle for assessing."

Churchfield continues: "Equalization throughout the state is not the direct responsibility of the Washoe County Assessor's office, as perceived. Under the umbrella of the Department of Taxation (DOT), the Division of Assessment Standards (DOAS) conducts Ratio Studies.

"Ratio Studies are created every three years and measure whether the uniformity of appraisals made by county assessors are acceptable. If the level of uniformity is not acceptable, the Nevada Tax Commission equalizes values based on recommendations from the DOT. Individual properties or groups of properties may not be equalized.

"Also, we do mass appraising not fee appraising using comparables, such as a real estate agent would manufacture. The Board of Realtors has a structure of 18 property-value areas for residential sales in Incline. We look at the values of the whole area and others throughout Washoe County that are similar.

"We do not compare comparables of a property's immediate neighbors. Three comparables of this type are produced only when someone appeals.

"We admit some mistakes, but it was never our intention to overvalue any property. Regarding tear-downs (a home purchased to be torn down and replaced), it is possible that a property was valued higher than it should have been. To my knowledge there have been only a few of these. Because we look at the median price for land, it is very unlikely that a few tear-downs would skew the values for a whole area.

"Again, we have a system that has been evolving since 1981, and we are correcting mistakes. Tear-downs from now on won't be included in our valuations until building and demolition permits have been issued."

Faulkner adds: "There is also much contention over non-verified sales being included in our studies. By law we have to use actual sales. Transfers of properties and such do not end up in our data."

Tawny Stanton co-owner of Tanager Realty agrees. "Property transfers usually occur with an attorney and do not end up on MLS (Multiple Listing Service) sales documents. They would not be logged as actual sales."

Incline Values
Stanton explains further why she thinks Incline Village is more expensive than other areas around the lake. "For starters Incline Village is a planned residential community, not a resort community as are the rest of the communities around the lake. We have one General Improvement District that handles all of the recreation: beaches, tennis, the recreation center, the golf course and Diamond Peak Ski Resort, and more."

"We have four schools, police, a fire department, and Nevada has the advantage of no corporate or income taxes. Ultimately, Incline is location, location, location."

Churchfield says: "I understand that Incline is unique, the prices are high, and issues like retirees with fixed incomes are a problem. Maybe there needs to be special exemptions for these conditions and this area."        --By Jules Witek