The tax revolt at Lake Tahoe has reached the 10-year mark, with no end in sight. The Village League to Save Incline Assets was formed in December 2002 by a small group of Incline Village and Crystal Bay property owners to protest outrageously high property tax increases. This small group of determined taxpayers has been fighting Washoe County and the State Board of Equalization ever since. Even though they have won six cases in the Nevada Supreme Court, they have only achieved partial victory in their David-and-Goliath battle.
The Nevada Constitution requires “a uniform and equal rate of assessment and taxation,” but property tax assessments have been anything but equal for people living close to the lake; and now, for many property owners located throughout the state. Because the state had not provided uniform guidelines for determining property values, like other counties in the state, Washoe County had developed its own system for rating Tahoe parcels, including such intangibles as the view of the lake. For example, Mary Ingemanson, the president of the League, said she was assessed $80,000 a year in property taxes by Washoe County, while a similar property with the same lake frontage and a larger and newer home was assessed $18,000 by Douglas County.
After numerous battles with the county that escalated into the courts, Washoe County re-assessed the properties in 2006. The assessor went back to the beginning of the protest, estimating how much the properties should have been assessed for those tax years. The county now had a starting point so it could roll back the tax assessments. But after all these years and several court rulings against it, Washoe County is still fighting to keep the taxpayers’ money.
In July 2011, the Nevada Supreme Court ruled that the county had used unconstitutional property assessment methods starting in 2002. The justices tossed out the Washoe County system and ordered the county to issue refunds to 8,700 property tax payers for the 2006 tax year forward. But what was once a $100,000 debt had ballooned to more than $43 million due to the wonders of compound interest. About 70 percent of residents have received their refunds, and the rest should be paid by August.
But the group is still fighting to get refunds for tax years 2003, 2004 and 2005, which should total around $20 million with accrued interest. Interest is still mounting, costing Washoe County thousands of dollars a day for its delaying tactics. The Nevada Supreme Court ruled in favor of some individual taxpayers, who received refunds, and later affirmed that their ruling applied to all the taxpayers who owned lakeshore property in Washoe County, but most of them are still waiting for their money.
In February 2012 another Supreme Court ruling required the State Board of Equalization to hold public hearings on creating a uniform way for all counties to assess property values. The justices blamed the state, not the county, for the Lake Tahoe mess, saying the state hadn’t performed its duty of ensuring that county assessors value properties using similar standards.
The State Board held two hearings last fall. In the first one, after hearing the taxpayers’ side of the story, the board agreed unanimously that the Washoe County assessments from 2003 to 2005 were incorrect. But as soon as word got out about the board’s decision, political pressure must have been brought to bear, because at the next hearing in November, the board reversed itself. It ordered the county assessor to go back and estimate what the value of each property would have been 10 years ago. Even though they had already done a re-assessment in 2006, this allowed the county to stall for another 6 to 12 months. Another meeting of the State Board of Equalization is scheduled for this month. Will the board do its constitutional duty this time and finally grant justice to the Village League?
The injustice of the Tahoe owners is indicative of the property tax system statewide. A fair equitable and reasonable solution must be instituted post haste or assessors throughout Nevada will waste even more taxpayer dollars defending the indefensible.
For a 31-page history of this epic battle, visit NevadaPropertyTaxRevolt.org.
Originally published in Nevada Business Magazine: