State, Tribe Make Deal Over Taxes

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The Nevada Tax Commission has approved an agreement with an Indian tribe in Reno that will enable the state to share in some of the tax revenue from business on tribal land.

Arlan Melendez, chairman of the Reno-Sparks Indian Colony said the agreement endorsed Monday is "a win-win situation" and will "help us to deter any conflict that leads to litigation."

The colony has land south of Reno and enticed a Mercedes Benz dealer from the Sacramento area to locate a franchise there. When that was disclosed late last year, there were complaints from local officials and others who said it would drain tax revenues away from local and state governments.

Under an existing agreement, the tribe keeps the revenue as long as its sales tax on an item matches the tax imposed locally. So the tax collected on all cars sold by Mercedes goes to the tribe.

Chuck Chinnock, executive director of the state Department of Taxation, said the new agreement provides that the state will get the use tax on all leases of vehicles by Mercedes.

Chinnock told the Tax Commission that about 25 percent of the vehicle sales are actually leases, and the use tax imposed on lease payments will go to the state and local governments. Officials had no estimate on how much revenue the agreement might produce.

Steve Moran, involved in economic development efforts for the tribe, said the money gained by the tribe will be used to build a health clinic. He added that should help save Washoe County some of what it currently spends on health care for indigents.

Under the agreement, the land is not taxed. The land, formerly agriculture property, was purchased by the tribe. But Mercedes owns the building and that's on the property tax rolls.